Social Media is only successful because of the human need for active participation in its own fate. During the agricultural age, people mostly listened to the religious leaders and their fate was not in their hand, in fact anyone who tried to take a stance was murdered, Jesus and Socrates style. During the industrial age, a great deal of power shifted to groups of people (corporations) and those who were in, benefitted, those who were not... did not. During the information age and the technology revolution we are experiencing, power is shifting where it belongs, the people, and the people have found the vehicle of convergence, social media; companies who don't recognize this shift are going to be ill equipped to exist within the next 5-10 years.
Social media's effect on a brand and corporate reputation can be instantaneous and far-reaching. Companies are discovering the need to monitor and measure this growing space, but the long term impact of social media will change how companies deal with product decisions, inventory, market positioning, investments, suppliers and employee relations. IT's role will change too, because all the current systems to manage the day to day business will need to be "real time" enabled, in order for companies to not only compete, but survive.
Anyone who thinks that's a far reaching statement should review the impact of the web on business systems in the past 10 years.
Web 2.0 technologies - with their emphasis on collaboration and sharing - continue to accelerate, but the social enabled web will change the face of business forever. We're reading daily, how customers and prospects are communicating online using some of these convergence vehicles, and making business decisions more quickly, and collaboratively as a result. Why would a company and the CEO of such not actively participate is beyond comprehension, and soon it will mean corporate suicide.
The corporate world knows social media is having an effect on business, and is trying to use it to enhance an old medium of communication such as marketing and PR, but has not yet fully grasped the true implications and purpose of social media; in some cases because there is much to hide, and in other cases because there isn't much to share openly... either way, that's one of the many reasons social media is so important; people want everything in the open... that's how it is, why should companies act any different? Transparency is rewarded; the old damage control mind set is not. Ask anyone who they rather do business with: the company that tries to be perfect and focuses on exposing that, or the company that openly embraces what it needs to change based on customer feedback? Ask yourself who you rather have a relationship with, someone who's constantly stroking their ego, or someone who humbly embraces change to become better every day. It's the same principle for how customers experience businesses today. If you are not going to embrace change, don't bother participating in social media, in fact hang your hat and go home.
Within businesses powered by social media, the human factor is not optional. Insights into behaviors lead to innovations, and innovations help people. Social media can help humanize big companies; the CEO has a channel that talks directly to the customer and listens all at the same time... Today people value doing business with people, not brands - that's what business 3.0 is all about.
Individuals are becoming brands, - but what's really happening is that individuals want brands to be on equal footing. People want brands to become a part of their network, and to talk with them, not at them, and they want their voices heard and acted upon. Social media powered business, is not just a new frontier of how business gets' done, it is the oldest form of business dynamics, based on people talking with people. The right social media strategy will enable companies to harness the power of the relationship with customers, employees, suppliers, and investors to drive market innovation, improve profits and reduce costs - real time.
The true purpose of social media will really come to life when companies begin to learn how to translate the conversation into actionable business intelligence that allows companies to better align the values they create with those that people are willing to exchange money for.
Social media is a vehicle, but what is actually causing it to become the vehicle of convergence of choice, is the human desire for convergence, transparency and a better life. It can also be said that to truly understand social media, one must review the ages of humanity from the agricultural age, to the industrial age, to the information age and realize that we've gone from subservient lifestyles (agricultural age) to the introduction of the middle class (industrial age), and the upper middle class (information age) and are now beginning to enter the age of the realization of the higher self (the end of poverty)... this realization breaks away from being told what to do, or buy, into a world where the individual dictates how he/she wishes to be engaged.
It took over 5000 years to shift from the agricultural age to the industrial age, but the sad reality is that it took nearly 400 years since the beginning of the industrial age, when Leonardo DaVinci was designing machines, to the time GM figured out how to mass produce cars. During those 400 years, there were wars, chaos, shift in global political powers, and the financial collapse of 1933, which finally provided a wakeup call. What people wanted, and what the establishment provided during those painful 400 years was completely misaligned; only when the establishment collapsed did the real progress begin. Sadly we are facing the same resistance to change today; the economy is down not because money has disappeared off the face of the planet, but because there is a misalignment of values worth exchanging money for. Why?
Because consumerism is dead, as such the true winners of social media will be those able to put people who are currently called consumers, at the helm of their business, and actually begin to let sentiment drive the company's behavior vs. the other way around, which sadly is what most marketing people are trying to make social media about. For businesses to truly adopt social media they need to invest in understanding human behavior and human desires almost at an esoteric level; this will allow them to translate such understanding into valuable services and products people are happy to pay for, because people created them by participating in the process.
So far, most of the focus around social media has been around marketing and PR, but the real win in social media will come when companies start focusing on creating real time decision engines around the social media data intelligence. Real time decisions around inventory levels, product quality, training programs needed to address customer service issues, pricing, real time demand to forecast models, and so on.
The true winners in social media are companies developing real time crises, opportunity, and operational management environments so that what the company delivers, aligns with what people value within the parameters set by those same people.
The role of sales, marketing, customer service, finance, operations, IT, and even the CEO needs to change as producing values for people based on what people actually value today in the here and now; not based on some financial projection to meet Wall Street demands. The good news is that it won't take us 400 years to make this fourth age of humanity shift, there are some key leaders already setting the stage, the rest will have to transform or risk extinction.
The sooner businesses start to change their entire operating models to people driven instead of the old marketing "consumerism" driven models, the sooner we will experience economic recovery and prosperity due to an alignment of values people are willing to exchange their money for. This is a paradigm shift in business thinking for many, to let the customer dictate what to build, vs. the old "build it and they will come"; social media adoption sits at the heart of allowing businesses to make this shift by the sheer nature of being open to hearing what the buyer has to say and making adjustments as appropriate.
###
Tullio Siragusa is Author of Unlocking Your Empire - Keys to enable your social media powered business.