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?

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.

I followed a link that said “26 social media marketing sins,” and as I clicked through, I was thinking “yet another bogus list.” However the blog post that I found, “We Have Sinned” by David Berkowitz, is quite good, very clueful. I’m feeling a bit holier than thou because I haven’t committed many of these sins, mainly because I’m not coming to social media from a marketing background, but as an Internet maven/web developer/online community proponent who was jazzed about “social media” before the marketing world gave it that name. I was part of the brew club that was cooking up the next generation web in the early 90s and 2000s, and most of us weren’t thinking about marketing applications at the time. We were thinking about virtual communities and online social networks and social software – various labels we used for the social web that we were weaving.

But as our business is more and more about marketing, and our clients tend to be marketing groups, I’m getting how easy it can be to make these mistakes. Social media marketing – and marketing in general – isn’t easy to do well and do right. Berkowitz’ list is valuable. Some examples:

We have failed to monitor social channels for discussions of our brands and competitors.

We have guessed at our target audience’s interests and activities rather than conducting research that could have provided real answers.

We have lost consumers by organizing social architectures that were impossible to navigate coherently.

We have repurposed creative and messaging from other channels when we should have adapted or created it for these social spaces.

We have shortchanged social marketing by planning campaigns instead of ongoing programs.

You get the idea. Read the whole post, it’s insightful.

Kevin Marks has an insightful post about how Twitter works (in theory), noting how the act of following on Twitter is asymmetrical, meaning that you can attend to tweeters who aren’t necessarily your friend. On the other hand, because you can reciprocate, you have the possibility of hanging out with friends, so Twitter can be at the same time a water cooler and an auditorium. I especially like Kevin’s comment that “the key to Twitter is that it is phatic – full of social gestures that are like apes grooming each other.”

Both Google and Twitter have little boxes for you to type into, but on Google you’re looking for information, and expecting a machine response, whereas on Twitter you’re declaring an emotion and expecting a human response. This is what leads to unintentionally ironic newspaper columns bemoaning public banality, because they miss that while you don’t care what random strangers feel about their lunch, you do if its your friend on holiday in Pompeii.

I also like his explanation of mutual media:

What shows up in Twitter, in blogs and in the other ways we are connecting the loosely coupled web into flows is that by each reading whom we choose to and passing on some of it to others, we are each others’ media, we are the synapses in the global brain of the web of thought and conversation. Although we each only touch a local part of it, ideas can travel a long way.

Evolution of the social web: while we were thinking about the implications of Google Wave and starting the Austin Google Wave Meetup, Facebook was arranging to buy FriendFeed, our favorite digital lifestyle aggregator. Smart move? Depends how Facebook integrates FriendFeed, but it feels like a helpful crack in the Facebook walled garden. Friendfeed takes feeds from all kinds of content, has useful discussions, and you can upload images and files. It already integrates with Facebook and Twitter. Playing with these tools (and the iPhone) is a realization of our early 2000s vision of the web as an operating system, an environment for many media and many platforms that should, dang it, be interoperable, mashable, jammable. We often say Facebook is the AOL of the 21st century, a walled garden that could fail fast as convergence synapses start to fire across the open web. Facebook has to find a way to hold those eyeballs and rub ‘em against ads, tough to do if people keep walking outside and climbing the virtual trees, getting a view of the bigger World Outside. Buying FriendFeed is like buying a few of those trees, bringing them inside the garden… and maybe the future is in building a few treehouses with telescopes and ads on various surfaces. Hope we won’t see Zuckerberg brandishing a chainsaw.

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.”

Gaurav Mishra accompanied Dave Evans of Social Web Strategies as he conducted a series of social media workshops in Delhi, Bangalore, and Mumbai, sponsored by 20:20 Media, which has launched a new social media company, 20:20WebTech. Every workshop was full to capacity, and Dave’s on his way back to India tomorrow for more… [Link]

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.

On June 18, Dave Evans and I were part of the Texas Hospital Association’s day-long workshop called “Where Social Media and Health Care Meet – Harnessing New Media Tools.” We found an excited and diverse group from hospitals around and outside Texas. They understand how hospitals can benefit from social media, and I suspect many will follow the example of M.D. Anderson Cancer Center, which is making effective use of various forms of social media (including Facebook and YouTube). They also have clear, well-considered, published blog policies and guidelines. Aaron Hughling summarizes my presentation with Jennifer Texada of M.D. Anderson: [Link].

I made another presentation, and overview of social media. Here are those slides: