When we think about “social business,” a handful of buzzwords come to mind—from social media marketing and internal social channels to collaborative technology and even charitably focused “social enterprises.” But Nilofer Merchant has something different in mind, something that will have a much broader impact on the entire business landscape.
“The reasons that firms first had advantage—economies of scale and information efficiency—are substantively and fundamentally changed,” she told us. “Today, seemingly disparate but networked individuals can create value in a way that once only centralized organizations could. This shift is radical enough that it changes how much organizational design matters in what I term the ‘Social Era,’ to signal to leaders just how much has changed and why it warrants their attention.”
Merchant, an author, speaker and corporate director, discusses the new age of “social business” in her latest book, “11 Rules for Creating Value in the Social Era,” which was recently named one of Fast Company’s 12 best business books of 2012. The Harvard Business Review digital book discusses how incorporating a social foundation into an organization’s very structure and design can give it an edge in the coming years, making it more innovative and agile.
So how can businesses harness this shift to compete in the new Social Era? It’s not just about implementing internal collaboration channels or embracing social media marketing; they need to focus on individuality and co-creation, or what Merchant termed “onlyness.”
Value is not created in a top-down way, she says—it is created throughout all levels of the organization, as well as from different points in the value chain. Embracing ‘onlyness’ means that innovation and decision-making are distributed across employees at all levels and departments, and to consumers and partners as well, so every individual is empowered to create value.
“Onlyness is that thing that only one particular person can bring to a situation. It includes the skills, passions, and purpose of each human,” she said. “Without this tenet of celebrating onlyness, people are simply cogs in a machine—dispensable and undervalued. Which returns us back to the Industrial Era. Organizations need to really get this—this talent inclusion, across ages, genders, cultures, sexual orientation—is essential for solving new problems as well as for finding new solutions to old problems. Be the one to enable that connected individual in your enterprise through systems and leadership, and you'll win."
As a testament to the power of this approach—and its ability to foster innovation and agility—Merchant cites the example of Singularity University, a leading academic institution that aims to “leverage the power of exponential technologies to solve humanity’s grand challenges.” How does this university tackle such a weighty mission? With a small full-time staff of just seven people—plus the leverage of many, many more.
The seven employees represent the core of the university, handling program management, operations, and communications. They also recruit and manage 10 expert thought leaders from around the world, one for each of SU’s curriculum domains, who in turn act as “curators” to staff their domain with 10 or 20 experts. This global operation is often coordinated virtually, via Skype and other online collaboration tools.
“While the core group maintains the mission and continuity, the curators act as talent recruiters for the next layer: the extended outer circle of specialized talent that adds topical expertise and content delivery,” Merchant explains. “The talent ratio is 5% program management, 15% curators, and 80% content experts. As market needs change, SU is in a unique position to fluidly respond.”
“Imagine being able to do that across all parts of your business? Many organizations have been doing just that,” she added. “Instead of hiring direct staff, organizations have been using flexible resources. Instead of doing it themselves, organizations have been asking networked communities to co-create new outcomes.”
Essentially, the Social Era model embodied by Singularity University—leveraging a network of individuals as co-creators instead of relying on rigid employee roles and hierarchies—frees businesses to explore a dynamic range of ideas and strategies, all while getting the best input from diverse sources. It’s something we believe strongly in here at oDesk, as we’ve seen businesses grow by leaps and bounds by leveraging a flexible network of talented individuals—in our case, online contract workers—from around the world.
As a result, Social Era businesses are fluid, nimble, collaborative and powerful. Merchant’s mission statement for this new generation of organizations is described on her website:
Rather than try to power through with size, we’ll have to find power through shared purpose.
Rather than hiring and directing inside the walls of an organization, we’ll tear down those walls altogether and allow everyone to own a part of the big picture.
Rather than taking long stretches of time to perfect something, we’ll build fast, fluid and flexible organizations.
What we create in the end will be a different type of organization, one that embodies a culture of innovation.
So how can a business build this social foundation, transforming itself into a thriving Social Era operation? Merchant believes it’s achieved in phases, echoing the perspective of oDesk CEO Gary Swart and his Work 3.0 framework. She described it to us as follows:
Phase 1. Everyone works in the same building, in the same time zone, because the culture is so tacit that anyone working away from the building doesn't integrate into the core.
Phase 2: The organization has remote offices—major hub centers in different cities allowing for different time zones. This lets them have access to talent not found near the headquarter. Online platforms are starting to be used to coordinate work.
Phase 3: People work across time zones and cities, and some portions are freelance. The flexibility is built into location and time zone, across all talent levels. Online platforms are central to everyone being able to hand off to one another, and share status.
Phase 4: The organizational design is set up to optimize for flexible talent. The purpose of the organization is sharable such that it can be clear and you don't have to belong to the organization to create value with others. Online platforms become strategic to the flexibility of the organization, which is central to an organization’s ability to adapt to whatever happens.
What’s particularly fascinating is that while this path seems to mirror the evolution of global business as a whole, it is still an individual journey; even today, the business landscape is spread across this entire continuum. For example, many large and change-resistant organizations may still be stuck in Phase 1, while innovative organizations such as Singularity University are on the leading edge of Phase 4. While each business must follow this trajectory at its own pace, it’s becoming increasingly evident that those who lag behind will have a tough time competing in the Social Era—and that’s in the not-too-distant future.
Is your business incorporating elements of this Social Era model? If so, what results have you seen? We’d love to hear your perspective in the comments section below!