Ray Wang Surveys the Evolution of Social Business

Ray Wang, Principal Analyst and CEO at Constellation Research, Inc.

For a survey of the social business landscape, MIT Sloan Management Review turned to Ray Wang of Constellation Research. We asked him about the traits of socially networked companies, where leaders are fostering the use of social applications like gamification and how social business is changing how employees work together.

Do companies that have more developed social capabilities have specific characteristics or traits?

Short answer is yes. Leadership plays a critical role, but companies such as Procter & Gamble or Nike or Wells Fargo combine leadership with a broader force, the consumerization of technology. This adoption of disruptive technologies in the consumer world have people asking: Why can I do much more at home and outside of work than I can inside of work? With these social tools, I’m planning an event or having a conversation with a friend, or sharing and idea, or even collaborating in real time. How do I do this at work?

It’s key to understand the organization’s cultural persona first and then build an adoption strategy that matches culture or moves the culture. Leaders tend to come from the market leader and fast follower types.

What leaders are encouraging the development of social business?

Chief digital officers get it. They are looking at social in terms of being able to close the gap between strategy and execution, execution and measurement, and measurement and strategy. This is a loop required in integrated marketing and social business. In fact, they get better insights, really trying to take this data, transform it into information and insights, then figure out: how can we make better decisions? So there’s a data-to-decision path that the chief digital officer is taking, which is pretty powerful.

The CMOs, I think, are on their way to figuring this out. The chief marketing officers were looking at it more as a PR thing and crisis management, and now they’re realizing okay, there’s a lot here — this goes a little bit deeper.

Chief product officers definitely get it because they’re looking at this right now to accelerate innovation and collaboration around contract workers, disparate workforces, different teams, partners and suppliers.

The CIOs are saying — well, we’ve already got SharePoint. They are saying look, you guys are spending all this money trying to do all these different projects, which is great, but at some point I’ve got to scale this platform so everybody can use it. And so the CIOs are also championing it, but they’re trying to figure out hey, can you guys just choose one thing and run with it?

The CFOs are interested if you’ve got the metrics, if you’re starting to show some interesting results. So, for example, can I displace a customer support call on Twitter from a channel and actually be much more effective? Whether it’s driving revenue, reducing my channel cost or improving resolution times, the CFOs are interested because the metrics matter for them.

What are the key signposts companies should look for as they develop their social capabilities?

At the beginning you’re starting to talk about how social fits inside the organization and are doing experimentation. You know you’re successful when you’ve identified an outcome and measured results. As Stephen Covey says in his classic, Seven Habits of Highly Effective People begin with the end in mind. And if you don’t have that during experimentation, you’re really not going to get too far.

Once you’ve got the metrics and got business models in place, you’re starting to see some of the results.

So if you’ve finished one project and you’ve seen some results and some lessons learned, you then go from Step 2 to Step 3. You go back and take it to someone else and say look, this thing is growing, let’s try it for one or another project. Now it’s about taking that same model and applying it to different organizations, different divisions, different projects, and taking it to that level.

The move from Step 3 to Step 4 is very different. At this point, you’re saying look, this is really working. I now need to get funding. You’ll be in Step 4 because it’s not a real project until you’re on a budget. But let’s take a look. You’ve got executive support, you’ve got a set of metrics that you’re measuring against, it’s in some business model, and you’ve tried it in some other divisions. The odds of you getting long-term funding then are pretty good.

The other challenge that you might have along the way is a feeling of …oh my god, this social thing’s working too well. I thought I didn’t need all these people. Suddenly it’s like oh — we might need just as many people, since we’re achieving different sets of goals. So what is happening now is not necessarily addressing, say, your original automation problem, but it could be addressing a different need that hadn’t been met.

Internally, people will have all these different collaboration tools, ideation areas, and then suddenly realize, oh my god, this is way too much information. How do I get to context? How do I get to the relevancy? That’s the next step.

And so, what people are trying to do now is just figure out, can I make sure that the average employee or worker sees the streams that they need to see? And this is why we see context emerging as that next big area.

So you’re seeing these shifts occur in terms of the scaling to match demand, and when you pass that, then you’re able to get to this higher level of saying okay, we’ve got to do a lot more. And that’s how you hit each one of these stages. I think they’re pretty defined.

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A few years ago you identified 43 use cases of social business. Which of those has really caught on?

What we see the most right now, just because of our client base, is in the service support use cases. In fact, the escalation and resolution one is most popular, followed by, believe it or not, hire to retire on the on-boarding side. These tend to actually be driving a lot of the conversations. And then there’s innovation and ideation around projects.

For innovation and internal ideation, it’s tapping into hidden talent, collaborating across multiple disciplines, and creating the best design for a use case. After that it is projects that are picking up, which is really around improving team communications, driving collaboration, gaining greater input and diversity of ideas and improving sourcing. And then there’s sales — prospect augmentation is probably the one after that: improving the cold-to-warm lead conversions.

What about gamification? How important is that aspect of the social business phenomenon?

It turns out that the three areas we talked about in gamification are still very valid. One is recognition — everybody wants to be recognized. Hey, congratulations, there’s a leader board, look at what you did, let’s highlight someone’s work, have someone from above say oh my god, congratulations, you’ve done a great job here. So recognition is always hot.

Now, once you’ve got the recognition, the next level up is access. So as a customer, give me access to the special sale, or let me see a product before somebody else, or provide me with a day with the CEO, or an hour with the CEO, or a lunch with an executive, or a monthly mentorship call, or get me into a special project that you wouldn’t put me on before. So this is becoming a currency that people don’t even think about in terms of trading, in terms of awards.

And then, the last piece is really about making an impact or having influence. Being able to work on a project to get something out there. Being able to be part of the decision-making on a brand-new product launch. Having a customer come in and say look, wow, I got to be part of — my feedback was actually used in terms of this new development. It’s that impact piece.

Now, it’s interesting with this impact piece because if you suddenly find people doing this — and it’s usually about 5% of your base at most — you want to hire these folks. You want to bring them onto your team. From an internal focus, these are what we call your vision movers, people who are actually going to get work done, and they’ve got the ability to take these concepts and just move forward, and you definitely want to promote this.

So now you have a thing that’s feeding back on itself. You’re saying oh wow, I identified the high-pos and these high-pos are people we want — these high-potentials are people we want to continue to build a career path.

So, with gamification you’ve got monetary and non-monetary awards. The monetary awards move the needle at first, but then people are looking for a higher purpose. And it’s almost as if a Maslow’s hierarchy of needs occurs and people say look, I need more than this.

You’re doing work on crowd sourcing, innovation and the study of future of work. How do these connect with social business?

Let’s start with the future of work. What social business is really doing is reshuffling the deck. So on the one hand for individuals, it’s saying look, I now have a voice, I think I can make an impact, and whatever I’m doing here, there’s a shot that someone up on top is going to say wow, look at this. We’ve flattened the management chain and how ideas get filtered up, and I now have a shot. So I’m going to give it my best idea so that hopefully I get recognized. If I get recognized, I can keep doing this.

On the other side from an organization’s perspective, they’re looking at this and saying wow, there is so much human capital potential that we keep talking about, we’ve never been able to quantify this. So at the back end, what we’re seeing is a lot of — people call it big data or people call it information, but what I’m really seeing is there’s a number of signals — and these signals are actually percolating. The question is how do I find patterns in the signals to figure out what’s going on.

So for example, if you’re sitting on an internal community and let’s say someone has a topic that is getting a million different views across the organization. Who’s the node? Who’s driving this? Who is driving the conversation? Who are people referring to? Why are these people trustworthy? Who’s become the experts inside the company?

And suddenly you look and it’s turned out that one engineer you hired five months ago who is an entry-level staffer, but he’s driving all this conversation. And then over out in India, there’s another woman who’s driving this other conversation, and they’re the ones that are pulling this together. Quick, put them on a team. Let’s get them going. Let’s get a project.

So, suddenly you see you have data and information about who your employees are, what their interests are, what they can do and how this ties back to the rest of the organization. We’re going to see a lot more instrumentation of that in the future of work.

The author of a book called Humanize, argues that social media is a force to humanize the workforce because it’s giving the people a voice and making it a better place to work. Do you agree?

I think so — at this stage in time. But in maybe four years out, five years out, it’s going to dehumanize us because we’re all going to be seen as a number and a signal and a node inside the organization. And if you don’t stand out, it’s going to be a winner-takes-all system and you’re going to have 10 to 20% of the market as winners because wow, these are high potentials, we can measure them, they’ve got a career path. And then everybody else, it’s like oh god, it’s another cost center, it’s another cost structure.

I see a broader trend where people are investing in technology and not people. Organizations don’t see people often as a solution. They look at them as a cost structure. That’s a problem, in part, because a fool with a tool is still a fool.

But if I can identify the people who are actually the solution, that may not be 100% of the workforce, it might not be 70% of the workforce, I think it’s actually going to be maybe 10 to 20% of the workforce, and it’s a winner-takes-all system. I’m going to give them everything I can to make them successful. But everybody else is going to suffer.

But you might miss something. Because of our need to put things in quantifiable terms, we’re going to dehumanize everybody. It’s scary.

Use the opportunity in social to actually create new ideas or create commingling or create the conversations that don’t happen. And social is really a proxy for the fact — and this is the Marissa Mayer problem — that you’re not having those informal conversations anymore. People are disparate. People are working from home. People aren’t able to connect with each other in the same kind of intimacy.

What do you think are some of the barriers that people are finding in making social connections?

We’re facing social fatigue. Tell me, how many social networks are you part of today? Are you on LinkedIn? Everyone’s on LinkedIn, right? Because it’s your job, it’s your career. Are you on Twitter? Yeah, some people are on Twitter. Are you on Facebook? Yeah, I kind of keep up with friends there. And then, there are very special networks like Pinterest, sharing pictures with friends. There’s Path. There’s other things that pop up. And then work wants you to do this new community thing. So I’m on Yammer now and I’m on Jive. And this other project team wants me to be on this other network. I’m fatigued. I’m tired. I don’t want to sign up for something else. I don’t want to have to log in somewhere else.

So, what we’re seeing right now is we’re entering the stage of social fatigue. The only way to get out of it really is that the content has to be more relevant. Context is more important than ever. The context of a role, the context of a relationship, the context of a location, in the office, the context of where you are sitting in the department project, the context of time.