Which Companies Will Survive in the Social Era? A Q&A With Nilofer Merchant
“We should—um—put that on the Tweeter.” “You’re young—make something go viral!” Ever heard requests like these in your office? I know I have.
Social technologies—including social media, crowdsourcing, digital curation, and e-commerce—are changing the way people and companies interact and encouraging a more “open” way of doing business. Companies have recognized that there is real opportunity to capitalize on this trend, but many—maybe even the one you work for—are struggling to integrate social tools into their business models and corporate strategies.
In 11 Rules for Creating Value in the #SocialEra, a new e-book released by Harvard Business Review, author Nilofer Merchant argues that adopting “social” (and that goes way beyond “social media”) strategies is the key to survival in today’s business landscape. Drawing on her experience working for and advising both Fortune 500s and tech start-ups, Nilofer sees a growing divide between traditional corporate powerhouses and smart companies that are letting social define their business models. In #SocialEra, Nilofer offers a framework for pursuing openness, fluidity, and flexibility so companies can act less like "800-pound gorillas" and more like "800 gazelles," swiftly moving together to outrun the competition.
We had the opportunity to ask Nilofer a few questions about how businesses can evolve in the Social Era. Whether you work for a gorilla or a pack of gazelles, we’re sure you’ll find her ideas shed a new light on your industry and the businesses you interact with.
Let’s start with the basics: What is the Social Era?
The Social Era is the context for business in the 21st century. In the Information Era, value was created through and by the organization itself. But today, you can create value by connecting individuals who don't even belong to your organization.
Today, value creation can happen through organizing and connecting individuals together. Look at what Etsy has done to marketplaces, where many individual artisans have a shared platform to sell their unique offerings. Look at what TED has done with TEDx, allowing many people to curate events (and video content) on ideas that matter. Look at what Apple has done for mobile developers, or what Microsoft has done with its Xbox Kinect controller, allowing it to be a platform for artists and roboticists. Each of these are ways in which organizations are taking advantage of seemingly disconnected individuals and gaining power by bringing them together.
How is the Social Era different than or related to social media?
Whenever I use the word social, I'm using it in sort of a capital S, bigger way. People almost always hear social and add an extra word, media. And that's because that's what we've largely talked about for the last 15 years—how do we use these tools to communicate better? And while that's important, it just doesn't go nearly as far as it could for actually allowing us to create value in all parts of the business. HR, product development, distribution, and of course the more obvious ones of marketing and sales can all be affected by social in the big-S way.
What led you to write #SocialEra? Who do you hope is reading it?
I see so many corporate giants struggling right now, and I think that's not necessary.
Some think these giants are struggling because they have perfected how to be slow; but it’s really because they are still operating by the mindset of the 20th century, which assumes that to scale is to be big. But scale is no longer related to size—it’s speed that’s crucial to thrive in the 21st century. No one has told these organizations that the things they were taught in b-school about value chains and hierarchical constructs are not as valid as they once were. Our thinking has stalled about how our business models and our mindsets need to adapt.
I hope the leaders of our industries are reading #SocialEra. I know from Twitter that many entrepreneurs are.
In #SocialEra, you make the distinction between companies that act like 800-pound gorillas versus nimble companies that resemble a pack of gazelles. How can you tell which is which?
Organizations that act like 800-pound gorillas think their job is to direct and dominate over others. Others know that acting like 800 gazelles allows them to be fast, fluid, and flexible by design.
Here are a few key distinctions in old vs. new companies:
For those who work for a company that is struggling to evolve in the Social Era, what are ways you can take initiative or influence your team to be more nimble, open, and purpose-driven?
In so many organizations, too many decisions are still held by a few people, when the decision-making needs to be spread much further out—much closer to the customer. For example, you may suggest to your team that they adopt Google’s policy: Leadership shares the big picture of where they’re going, and then they ask (almost demand) people to figure out what their work has to do with the big picture. That allows many people to have their own sense of ownership. And whenever any of us co-own an idea, we also co-own its success.
What kind of questions should we ask during interviews to determine whether a company is evolving with the Social Era or clinging to traditional strategy?
During interviews, ask a lot about how open an organization is to sharing information and ideas. When an organization believes in sharing, it is saying that anyone can make something better for everyone. And, the real key is that an open approach can get to new and better ideas—and a lot more of them—faster. Openness is about allowing anyone, anywhere to contribute. Not just the people you think “can” or even the people that you think “should,” but from the abundance and diversity of many people’s experiences.
This is the hallmark of openness: It strengthens not just the direct task at hand, but it builds community, and it speeds the creation of new solutions (especially new solutions to old problems). So, during interviews, I suggest probing around closed vs. open approaches and see what you hear.