‘Social Business’ is Past Retirement Age

by Andrew McAfee on November 10, 2010

When I was a first year doctoral student at Harvard Business School in 1994-5, we took a fascinating yearlong course called “Basic Readings in Administrative Theory” (OK, it was probably only fascinating if you were a geek). It involved reading close to a book a day, and touched on most of the major areas of business scholarship, including strategy, innovation, and org structure. The single biggest group of books and articles we read, though, had to do with business as a social system. More than 15 years later and off the top of my head, I can still remember that we covered:

I bring this up to make one point: the idea of a ‘social business,’ a hive mind guided by open leadership marshaling people, process, and technology, is not new. It’s been around for 80 years, and has been studied intently throughout that time. In contrast, Enterprise 2.0, which I’ve defined as the use of emergent social software platforms by organizations in pursuit of their goals, is a novel phenomenon.

This distinction matters. It matters because telling business decision makers “There are some important new (social) technologies available now, and they’ll help you address longstanding and vexing challenges you have” is very different than telling them “Business is social, and the more deeply you embrace that fact the better off you’ll be.”

The former sentence, I’ve found, is pretty effective at getting their attention. The latter one is less so, because I tell you with complete certainty that they’ve heard it many many times before. It’s a message that has been broadcast into the executive suite for fourscore years now. Sometimes it’s been delivered with great skill and clarity, sometimes not. Sometimes it’s been internalized and acted on, sometimes not. But the message has been heard so often that it’s faded into the background. I’ve found that the phrases “business is social” and “people, process, and technology matter” have lost most, if not all, of their power to persuade decision makers.

Most of us agree, though, that we need to persuade them that something really interesting is going on right now at the intersection of people, process, and technology. There’s a movement gaining momentum, and we should name it and talk about it in ways that will accelerate it. I don’t care much what the name is, but I care a great deal about the discussion.

“Should this movement be called ‘Social Business’ or Enterprise 2.0?’” is a dumb debate, and one I’m not going to participate in any more (here’s what I’ve said about it). Advocating something like “social business design should place technology at the very, very end, and people first” is both dumb and harmful, which means that a response is important. So here’s my response:

If you’re saying that people are important, that businesses are inherently social systems and that social dynamics matter for performance, your insight is about 80 years old. If you’re saying that businesses would be better served by becoming more social, you’re once again decades behind the frontier. Same thing if you’re advocating that leaders be more open and attuned to the cultures and conversations of their organizations and customers. Ditto with emphasizing people, process, and technology. Maybe it’s important to say these things once again and maybe it’s not, but no one should pretend that it’s novel.

What is novel is the digital toolkit available to help businesses and their leaders become more social, more open, more Theory Y, more Model 2, etc. In the 2.0 Era, these tools experienced a quantum leap forward, not an incremental improvement. Because business is so social, this quantum leap is a big deal. So the movement is, in no small part, about the technology. These are the central points of my work on Enterprise 2.0, which has been conveyed in articles, my book, and this blog.

This quantum change in technology is the reason that the Enterprise 2.0 conference, going on right now in Santa Clara, exists and has grown. It’s also why new companies like Jive, Socialtext, Spigit, Atlassian, Yammer, and many others exist, and why established enterprise software vendors including Microsoft, SAP, Salesforce, Novell, IBM, are making deep changes to their products (disclosures at end of post). It’s the reason that new professional services firms like Dachis Group and Altimeter Group are attracting interest and clients. It’s why the $250 million sFund was recently established, and why venture capitalist John Doerr said “If you don’t have a social strategy, you better go get one.” He didn’t say this because he suddenly realized that people were important and business was social. He said it because he saw how much opportunity there was to use the new social technologies to improve business.

I want to be clear: I am not asserting or implying that any these things happened because of my work. They’re happening because of the insights of the technologists that brought us into the 2.0 Era and continue to move us more deeply into it. All I did was try to describe what their disparate innovations had in common (hence the term ‘emergent social software platform’) assert that they were both novel and powerful, and back up these assertions with theory and evidence.

And all I’m trying to do with this post is draw a sharp distinction between an old business topic and a new one. ‘Social business’ is the old one, and has the vitality and energy of most 80 year olds. There are much more interesting things to talk about.

Disclosures: I have been a compensated speaker at events held by Spigit, Salesforce, Microsoft, and SAP. I’ve received free use of cloud-based software from Jive and Socialtext. SAP is a sponsor of my center at MIT.

  • http://twitter.com/liorsion Lior Sion

    Totally agree. The distinction is very important. I also think there’s so much more to E2 than being social, although that’s a large part of it. And I agree that technology is one of the important things that we have to enable this.

  • http://blog.pmtechnix.com Bruce Lofland

    The place where I work has recently rolled-out a Social Media tool to be used internally. I have blogged about it here: http://blog.pmtechnix.com/social-media-in-the-workplace/

  • http://martijnlinssen.com Martijn Linssen

    Andrew, thanks for reacting during this #e2conf

    I didn’t advocate that social business design should, I just wrote that it does [place] “technology at the very, very end, and people first” – and of course I agree with that

    I’m at a loss regarding your (italic) response though. In its first paragraph you state:

    “If you’re saying that businesses would be better served by becoming more social, you’re once again decades behind the frontier”

    and in the second you want to:

    “help businesses and their leaders become more social (…)”

    Wouldn’t that put the goal of E2.0 decades behind the frontier as well? Regardless of the quantum leap tools you want to do that with?

    I agree that the enterprise has grown out of control. Its increased size has resulted in an exponentially increased distance between employee, customer and management, just like this universe is continuously expanding and almost only increasing the empty space between the stars. The result is latency, rigidity, anonymity and a general lack of involvement

    Technology can bring back together the players, but the enterprise has adopted complex management and communication models on its way to expansion, and if we’d merely take the AS-IS and put the wiring back together that would only short-circuit it all: it wouldn’t bring back involvement, intimacy, flexibility and swiftness

    In order to do that, we need to undo the workaround we put in place on our way to expansion: hierachy. We need to get back to wirearchy (http://www.wirearchy.com/), in order to re-enable horizontal and peer-to-peer based communications and interaction between people – in the enterprise

    Hence: People, Process, Technology – in that order

  • http://www.seekomega.com Mark Fidelman

    I disagree, the order of People, Process, Technology is not fixed and is situational. It’s dependent on an organization’s culture and readiness for Social Business Solutions. Therefore a well thought out strategy (and perhaps a pilot) determines the order and emphasis.

    I’ve seen companies lead with technology which changed the people and I’ve seen people lead with process for which they eventually found a technology to better support the process. Each situation is valid and each has worked.

  • Yael

    When you start the conversation with technology, I find that very soon you’re into feature comparison of different tools and miss the opportunity to address the non-technical issues. Of course people and business have always been social, but changing the natural, physical mode to the online mode requires a change in culture, behavior and the way we work. Because the interaction is online, it is very public, it is flatter, it requires new habits. That’s what I stress when I put people first, technology second.

  • http://twitter.com/Greg2dot0 Greg Lowe

    As being one of the most vocal practitioners, I’d like to say that I’ve disliked “Enterprise 2.0″ for quite a while. There are a couple of reasons. First, the phrase seems to point to it being a “tools” discussion when in actuality, the effort really needs to be to make the tools transparent. Second, the “2.0″ moniker has been over done and falsely indicates that this is a new version, or a replacement for 1.0 when it really is nothing more than corporate evolution. Additionally, whenever someone wants to get attention, they throw a “2.0″ on the end. With that being said, we have an “Enterprise Cultural Evolution” that is emerging and being driven by Consumerization of the Enterprise. While it is exciting and real change, putting a label on it helps to make it easier to explain and have people “get it”. Let’s not get hung up on the deep dark implied meaning of “Social Business” and instead think about the people we are trying to influence.

  • http://twitter.com/lehawes Larry Hawes

    Thanks for being a central figure in this on-going debate. I understand and agree with your point about the label being largely irrelevant. However, I strongly disagree that the focus of this “people matter” movement should be on enabling tools. Please see the more detailed response that I have posted at http://lehawes.wordpress.com/2010/11/11/enterprise-2-0-or-social-business-who-cares/

  • http://twitter.com/dpontefract Dan Pontefract

    Wow. Between Howlett’s critique (http://www.zdnet.com/blog/howlett/enterprise-20-is-beyond-a-crock-its-dead/2607) & Martijn’s comments, seems as though the ‘movement’ is becoming polarized.

    Let alone various lines in the sand drawn with recent developments at Dachis, Constellation, Altimeter et al.

    Not to be too Canadian in all of this, but I agree with both sides. (if in fact, sides are developing)

    On one hand, we do have the various social/digital toolkits emerging that will (and is) assist leaders and organizations become more social, which in turn drives business results, customer satisfaction, etc.

    On the other, we have leaders and organizations ‘waking up’ to realize their employees are no longer following, and that command and control dynamics are wavering in favour of more cultivate and coordinate approaches. (see Thomas Malone)

    Every organization, large or small, may be at different stages of this evolution … be it with the digital social toolkit or the behavioural evolution of leaders and employees alike.

    Both need to be considered equally; it isn’t an either or ultimatum in my opinion.

    I wrote pieces earlier this year somewhat anticipating this battle royale. Whether or not you agree (and others) is of course your ‘social opinion’. ;-)

    The Holy Trinity: Leadership Framework, Learning 2.0 & Enterprise 2.0 — http://www.danpontefract.com/?p=386

    The Org Structure of Enterprise 2.0: — http://www.danpontefract.com/?p=343

    And finally, Jon Husband deserves some credit here — http://www.wirearchy.com — he’s been going on about this for almost 20 years.

  • http://www.erinandaaron.com Aaron

    No doubt the technology part is where the innovation is. The people/process part is all about adoption strategy. It’s not that you’re trying to sell people and process and social business to management – you’re trying to appeal to management by applying technology in the context of people and processes.

    This whole argument is about technology management – we’re simply ensuring that the application of technology is in service to business goals; that tools are developed, applied, and iterated as company culture shifts; and that culture begins to drive adoption of the technology.

  • Anonymous

    Mr. McAfee you raise an outstanding point/issue to ponder. I sort of agree and disagree; I agree that the mantras of “business is social” and “people, process, and technology” are so worn that they don’t arouse interest when stated, they get a “sure, whatever, I know that” kind of response. BUT I would say that in fact it’s that these concepts are so driven into (still not enough, but most) managers that has enabled such as your E2.0 work to become of interest and, slowly, accepted. It is the necessary underpinning in order to facilitate E2.0. So I would state it such as this concept of social business MUST remain in both curriculum and repeated relearning throughout business life BUT it is “just” rote learning and indoctrination upon which more meaningful and tangible concepts are built. It is the axiomatic, philosophical basis without which we would not – could not – otherwise gain traction, for it is so commonly accepted that it is the precedent argument. So I would hope that people do not take your “past retirement age” concept to say we should abandon teaching and drilling this fundamental axiom. Not doing so will lead to uninformed sorts of countermovements and a lack of ground for wiser business education.

  • Anonymous

    You raise a great point. I think we really need to call the TERM (not meaning) Enterprise 2.0 past retirement age, with all due respect to Mr. McAfee, and find something more business-meaningful. Also, I would say that among many people I find the E2.0 term is perceived as techy and also taken as “just the next thing” given it’s “2.0″ (the thinking being, “so what, I guess I may as well wait for 3.0 and besides they obviously haven’t thought it out if only on the second version” sort of thing). So instead of going to Enterprise 3.0 as the concept is developed perhaps going to something like Enterprise-Think to indicate that we are moving past the limitations of Group-Think (the silo-ization, the too-inward thinking) while keeping the positive aspects (high collaboration, highly connected).

  • Michael Hafner

    it’s really funny how very very different the notion of social business ist between the US and Europe (http://www.socialbusinesstour.com/)

  • http://twitter.com/briggzay christian briggs

    Thanks for writing this, Andrew. You have given words to a discomfort i’ve had for a while now with the heavy use of the words “social media” and “enterprise 2.0.” In fact, i cringe every time i have to use these words in the course of my PhD work, and in my small company SociaLens (and yes, i’m a little uncomfortable with our company name for this reason).

    Our company determined early on that we would refer as little as possible to “social media” and the foundational thinking from folks like Weick, Schon, Argyris, Trist+Bamforth/Tavistock, Bourdieu etc, etc. in which our approach is grounded, in part for the reason you mentioned in your post.

    We have instead settled on a different approach and terminology that you and the folks reading this might find interesting: We help people and organizations to develop the “digital fluency first.” What we’re finding so far is that doing a little fluency (beyond just “literacy” or basic knowledge of how to use ESSP’s) assessment and coaching helps technology selection, strategy formation, execution etc. to be more effective.

  • http://twitter.com/Alex_Stocker Alexander Stocker

    Thank you for that great posting.

    Yet saying is one thing – but doing is another. At least here in Austria, decision makers (CIOs) have limited awareness for the potential and (business) value of Enterprise 2.0 / social media in the workplace – but they have also limited experience.

    Because of the ‘Nutzungsoffenheit’ of E20 tools, (German speaking for the phenomenon that E20 tools do not dictate a certain kind of usage (behavior) compared to other business software, e.g. SAP), understanding the business value is a tricky thing – you have to use it to find out about its value.

    I therefore suggested Austrian’s CIOs to start with profiles on professional social networking platforms (e.g. LinkedIn, Xing) and find out more about their potentials. If they don’t stop using such platforms, they will find it out sooner or later.

    Best from Austria,
    Alexander Stocker

  • http://twitter.com/henrysinger Henry Singer

    As a user and advocate of a Jive solution in my professional services firm I can tell you that your emphasis on the technology is “spot on”. I have collaborated with colleagues for many years prior to using Jive, but the context is now altogether different. We are successfully using the technology in many phases of our service delivery lifecycle, from opportunity identification through sustainment. Thanks for the post.

  • http://uptownuncorked.com geechee_girl

    I agree. My favorite slide I use in presentations is the one that outlines the start of “social media” in the 70s and the start of social business decades before. Great article.

  • http://twitter.com/aging29 xiaoyan ma

    I totally agree that social media is very important.

  • Matt Moore

    I’m really uncomfortable with the heavy tool focus that seems to have soaked up all the energy around Enterprise 2.0. A lot of this seems to be driven by the influence of the vendors (e.g. IBM, SAP, Microsoft, etc) who bankroll the conferences. What was remarkable about the tools used by people like Euan Semple and JP Rangaswami was how freakin’ simple they were. Wikis. Bulletin boards. These were “boring” technologies in the best sense of that word. The boring tool was then a platform to do something interesting inside the organisation.

    The issue I see plenty of is organisations who believe that installing a wiki will fix all their collaboration issues – when they have an incentive system that encourages their staff to compete against each other like “Survivor” contestants. And then: surprise, surprise, it doesn’t work. Collaboration tools (or Enterprise 2.0 or social software or WUT-evah) are not magic pixie dust. They have a role to play but implementing them won’t fix crappy organisational structures.

    “‘Social business’ is the old one, and has the vitality and energy of most 80 year olds.”

    N.B. Many senior managers I encounter are baby boomers whose managerial styles were shaped in the 60s or earlier. They often don’t have MBAs (gasp!) So I see the work of Argyris, Weick, etc as unfinished business. While they might be old hat in academia, I’m not so sure that this is true in the wider world.

    And I see the current focus on tools as a dodge to evade some really hard questions around how we run our businesses. It’s so much easier to be schmoozed by a software salesman than to actually roll up your sleeves and change your business.

    Now that said, I use collaboration tools every day in my business – and with my partners and clients where possible. I think these tools are useful but I can’t go on holiday and expect Google Docs to write scintillating proposals for me.

    “If you’re saying that people are important, that businesses are inherently social systems and that social dynamics matter for performance, your insight is about 80 years old”

    One of the most important effects of social software is that it makes social interaction visible. Historically, many mediocre managers were able to pretend that unsanctioned employee-to-employee or customer-to-customer or employee-to-customer interaction wasn’t happening. That delusion is much harder to maintain now.

    What I’d like to see is a return to those old, “boring” stalwarts: improved operational effectiveness and innovation. They might be boring but everyone still wants to talk about them. Tools can definitely play a role here – but a wiki or a microblogging platform won’t achieve either of these objectives by themselves. I’d like us to talk about people, processes and practices at least as much as we seem to be talking about tools at the moment.

  • http://www.modularhomesnetwork.com Factory Built House

    I am learning as much as I can to pursue a career in Social Media.

  • http://www.mollyflatt.com Molly Flatt

    Brilliant article thanks Andrew – but surely it’s the COMBINATION of the old theories/insights with the new technologies that matter. Many people are specialists in one or the other but not looking at how to bring them together in a coherent and thoroughgoing approach. Social business pimped by 2.0 technologies: now *that’s* exciting.

  • Clarissa S Felts

    Excellent commentary Andrew. I agree with you completely. The problem in my experience is many critics and anti-E2.0 consider social business as Facebook and discredit the value of collaboration. The tools have made the speed and magnitude of collaboration beyond anything we have experienced before. It is like the difference between travel by horse and buggy and travel by space shuttle. They’re both types of travel – but the latter is much faster and covers much more territory.

    Let’s all move on to talk about the more interesting topics….

  • http://www.parcadunyasi.net parça kontör

    I am learning as much as I can to pursue a career in Social Media.

  • http://profiles.google.com/alexander.stocker Alexander Stocker

    Great Post! Best, Alexanderstocker

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