Opportunities for small businesses – It was apparent a few years ago when ‘social media’ began to excite the entrepreneur community and small business owners. Immediately, the potential for taking the prime promotional mechanism of the start-up and small business world – ‘word-of mouth’ – and amplifying its reach was recognised. The opportunity lay in being able to leverage connectedness across a far wider arena. The business owner, traditionally limited in how many people they can talk to at any one time, now saw that these freely available channels could be used to engage potential investors and customers. Furthermore, the culture of these mediums fitted with the personalised method of interaction typical of the small business environment – interactive, personal, and reliant on maintaining a good reputation while advocating the merits of others within their extended community, and valuing the relationships that evolve through dialogue and exchanging value. I remember reading reports of when business luminaries and government ministers were attending events hosted by the small business community, they would openly exclaim their surprise at how quickly SME owners had grasped the import of the ‘social media’ phenomenon and were beginning to use it to enhance their business offering.
Taking advantage of their agility and personal approach to the customer, the tools, and the interactive digital channels the small business can now reach out to a potentially global audience. However, to compete effectively small businesses will need to focus on how they resource their operations. This will involve;
- Adopting sophisticated marketing approaches involving capturing market and customer data and turning it towards smarter strategy and programme development.
- Understanding the potential of brand and evolving their propositions appropriately to manage customer expectation, reputation, and deliver consistent value.
- Ensuring systems, processes, and infrastructures are equipped to handle increased levels of customer traffic.
- Developing effective partnership and channel strategies that will support agility in accessing new market opportunities, and delivering long-term customer value.
- Establishing robust supply chains that are scalable and flexible.
- Equipping employees to comprehensively deal with diverse customer groups, business cultures, and engaging with international audiences.
The corporate conundrum – Large businesses in their very nature are scrupulous in assessing variables of risk, investment, and operational efficiencies. So it’s no surprise that when social reared its head, that large businesses critically eyed up this new wave of personalised engagement to see if it was just another ‘ripple in the pool’ or was it in fact a potential ‘tsunami’? The corporate structures that evolved throughout the 20th century adopted a command & control model, where anonymity ruled and business was conducted behind impenetrable walls – outgoing engagement with the external world was carefully controlled and inbound engagement remained ‘arms length’ and mostly conducted through intermediaries or frontline sales forces. Social media, however, rather turns things on their head and challenges the fundamentals which most corporates hold dear – ‘transparency’ squares up to ‘guarded secrecy’, ‘diverse market voices’ shout over the ‘crafted agency sound bites’, and the fickle mistress ‘reputation’ chooses to perch on the shoulders of the masses, and not within the cage of the brand guardians. “OMG, it looks like we might have a revolution on our hands” might well be the thought that’s beginning to surface in the minds of some, and yet the fact that this seems so incredibly unthinkable means that at best it’s viewed as a niggling upstart that will eventually nestle in the marketing tool box between digital and public relations. And a conveniently held view which will resonate with many will be “… with the investment in firewalls, customer relationship management systems, and IT infrastructures, why should we move to open systems? And how are we going to resource this activity? It just doesn’t seem to deliver the ROI that would make it worthwhile, and worst case scenario will compromise the integrity, robustness, and security of the business!” This sentiment is captured in ‘The Social Media Garden’ (June 2012) study carried out by Silverman Research in association with Unilever;
The four main barriers that an organisation needs to overcome:
- Lack of Knowledge & Understanding – of social media’s capability and how it can be practically applied.
- Fear – of change, failure, employee abuse, reputational damage, security violations.
- Business Case – absence of a well grounded case or rationale for implementing social technologies, and measuring their ROI.
- Leadership – senior management lack of use and understanding of social media, makes them sceptical of the organisational benefits.
But not everyone sees it this way. Unilever have started looking at how community collaboration using social media in the external environment for marketing activity, can be applied internally to generate better value for employees. Leadership is seen as the prime driver for change where senior managers just need to “get it”, so they can make the big decisions, while encouraging reverse mentoring from junior managers to embed organisation-wide understanding and adoption.
McKinsey have recognised there is great untapped potential for value creation across enterprises, and integration of social technologies will increase productivity within large organisations by 20-25%. In The social economy: Unlocking value and productivity through social technologies (July 2012) McKinsey predicts a shift away from email usage, and by making enterprise information more openly available using social platforms it will free up 7-8% of the workweek for more productive activities.
Wrestling with the behemoths – So if changing people’s mindsets, culture, and infrastructure aren’t a big enough challenge, how long will it take for an organisation to fully appreciate and integrate the full social dimension? Will it be a year? Years? Or a generation or two? What’s obvious is that large cumbersome corporate businesses are going to have to live with their capital locked into their current infrastructures for a while, which makes them vulnerable to quickly shifting markets and nimble new social-smart enterprises driven by those who are connected to an army of professionals through their social networks. This will make for an interesting play as different sectors grapple with what’s right for them, and how they need to reconfigure and redefine themselves to survive…nay, even how they do business.