I recently picked this up off of a Yahoo message board... "Sun has now fallen into the mid-cap category... Next week we could be looking at a small cap stock. Then the lights will be turned out and the yellow tape will wrap the Sun campus. Sun does not control their destiny any longer. The street has decided for them. The nightmare is near an end." What this person is referring to is the fact that Sun Microsystems just last week, once again handed pink slips to over 2,000 employees.
Why should we care? It's important that we keep our eye on this, what I refer to as "The Grand Social Experiment", because Sun is a Fortune 500 company who is embracing social technology (blogs, wikis, forums, podcasts, vodcasts, Facebook, Second Life, and possibly their own attempt at customer social networks) as a strategy-- as a means not only to increase customer accessibility, visibility, and interaction, but to reinvent itself and hopefully restore their once market prominence. Can social engineering save Sun Microsystems?
Sun Microsystems was founded in 1982 by Vinod Khosla, Andy Bechtolsheim, and Scott McNealy. In 1987 Sun formed an alliance with AT&T to develop a UNIX system for business computing. By 1988 Sun became the leader in the workstation market, with revenues reaching $1 billion. By the time the dot-com boom hit in the 1990's, Sun Microsystems was positioned perfectly to take a leadership position. It was during this period that Sun experienced a meteoric growth in revenue, profits, and share price that even its executives struggled to defend. It was during this period that Sun adopted the slogan "We put the dot in dot-com." But, as the story goes, that which goes up must come down. The synthetic expansion of demand during the dot-com boom eventually came to an end. When the bubble burst, the one-time king of the Internet suffered an enormous blow, leaving its market share and headcount in a compromising position.
In an effort to return to the profitability it had in the first Internet bubble, Sun has embraced open-source software, adopted servers based on competing processor technology, and switched CEOs. In 2006 Scott McNealy handed the reins to his successor, Jonathan Schwartz. Jonathan Schwartz is a maverick-- willing to try new things-- willing to embrace change in an attempt to reinstate Sun's position as a marketplace leader. But most importantly, Jonathan is a thought leader who has embraced social media and community as a means to reinvent Sunâ€"or at least the perception of Sun. Countless articles tout Jonathan as the #1 blogger of the Fortune 500â€" one of the few according to Fortune 500 Bloggers. In countless blogs and speeches Jonathan repeats the word 'community', again and again. The one thing Jonathan seems to understand is the importance of engaging the customer in the business. I truly believe that Jonathan 'gets it.' After all, today the customer, more than ever before, 'is' the brand. It is the massesâ€"the customers-- who will decide the fate of Sun and whether it's worthy of surviving and thrivingâ€"or not.
Not unlike any other enterprise, the biggest detractor to Sun's success with social engineering is itself. There is a great divide in Sunâ€"those who believe, and those who don't. It reminds me of the movie "The 300", where 300 Spartans against insurmountable odds fight a Persian army of more than one million soldiers. There is a great silent majority inside Sun who believe that Jonathan is taking Sun away from what's important. This same camp (what I refer to as the 'Old Guard') believes that all of this blogging, social adoption, and the creation of community is nothing more than a distraction-- an enormous waste of time. And every time new blood enters Sun to embrace Jonathan's vision for reaching out to the masses, the Old Guard selectively weeds them out with the next RIF (Reduction in Forceâ€"more commonly referred to as a layoff). Had Jonathan had more time, had the company not been on fire when he took the reins, possibly he could have focused a bit more on internal alignment before engaging the customers and the market-- like with Dell's EmployeeStorm initiative.
Sun Microsystems is the story of transformation and struggle, of rise and fall, of old vs. new. The battle for Sun is as much an internal battle as an external oneâ€"a battle to rebuild trust more than to build new technologyâ€" a grand experiment to reinvent Sun and the perception of Sun in the marketplace using social media, social networking, and Web 2.0. We're currently in the fourth wave of computing which is all about connecting us to our information and to each other. Today, more than ever before it's about word-of-mouth and connecting with the customer. And thanks to social engineering the market is voting-- continuously. The best CEO's today are thought leaders who listen intently to their customers, and take action. We've seen it with Dell's IdeaStorm, Starbucks' MyStarbucksIdea, and Salesforce's IdeaExchange. Best-in-class companies are embracing social engineering to change and form market perception, and to grow revenues and profitability. If Jonathan Schwartz is successful, it will be one of the biggest turnarounds accredited in part to the adoption of social technology as a major part of their strategy. If I were a Fortune 1000 CEO, I would be monitoring the impact social engineering has on Sun's transformation very closely, at least for lessons learned.