Collaboration and the Social Organization

HBR Webinar featuring Mark P. McDonald, Ph.D. 

September 10, 2013

Key Learning Summary

OVERVIEW

Social media has been around long enough that most companies know that they need to be on it, and are. But many are left wondering if earning “Likes” is all there is. Marketing and branding objectives are served, but can’t all of the energy around social media be more directly harnessed to create real business value?

It can. Properly deployed, social technologies can unleash the mass collaborative power of employees and customers. Internally, collaborative communities yield innovative responses to real business challenges and opportunities, driving results throughout the value chain. Solutions are implemented with greater passion and rapidity when they emerge from engaged communities than when ordained from on high. And external communities of interest can offer customers a highly enhanced value proposition, attracting more revenue. It’s high time that social media moved beyond the “beachhead of marketing” to the next level of value creation. The way forward: by becoming a “social organization.”

CONTEXT 

Mark McDonald explains how businesses can take social media initiatives to the next level by becoming social organizations.

KEY LEARNINGS

Truly social organizations use social media for more than marketing; they operate and collaborate differently. 

Most organizations these days use social media as a marketing tool, to attract attention to their brands in a crowded marketplace. Once gained, however, how to best leverage that attention into increased revenue seems elusive. 

Companies limit the potential value they can create when they restrict their social media efforts to marketing. There is a better way to use social media to fundamentally drive business results. It involves becoming a “social organization.”

A social organization is one that strategically applies “mass collaboration” to business challenges and opportunities. “Mass collaboration” refers to large groups of people joining together to achieve a mutual purpose using social media as a tool. By harnessing the collective knowledge, creativity, and energy of employees and customers, mass collaboration drives business results.

"Organizations use social technology but limit themselves to branding and marketing...It’s time to move beyond the beachhead of marketing to the next level.”- Mark P. McDonald

CEMEX transformed itself into a social organization in 2010. The CEO said it would never return to the old command-and-control structure, which is too slow and limiting. More work gets accomplished faster and more effectively today, spearheaded by collaborative communities united by a common purpose. 

"Mass collaboration is the goal.” - Mark P. McDonald

In social organizations executives must lead differently. 

In a traditional company, social media presents certain fundamental tensions. Open participation may present concerns about security or erosion of authority. Transparency might not seem prudent.

These tensions are absent in a social organization. Participation, independence, and transparency are valued. There is less need for top-down control because in an environment of complete transparency members hold each other accountable. In transitioning to a social organization, executives need to relinquish some control and let the collaborative communities self-organize and self-police.

With the fundamental tensions absent, the energy of an organization’s social dimension can be tapped. In that dimension, creativity abounds and the potential for engagement is high. It is a rich area for innovation, which is important in an increasingly complex digital world. 

The key to social organizations is mass collaboration. 

How do social organizations work? Mass collaboration creates the magic, not the enabling technology (no single technology has been linked to social media success or failure). Business results are achieved through a fundamental “cycle of collaboration.” 

The cycle of collaboration:
• Starts with a community’s organizing purpose, which dictates the type of contributions members make.
• Contributions receive feedback. They are voted on, discussed, liked or not liked.
• Feedback attracts attention. Social media efforts that target marketing might stop here.
To go beyond the “beachhead of marketing,” feedback must lead to judgment.
• Feedback builds into judgment, and the community begins forming its own collective views.
• Judgment creates change, producing the desired business results (e.g., a strategic insight, a solution, an innovation).
• Change is exciting, encouraging further contributions from community members.
• The change suggests a new purpose for the community to take up, and the cycle continues.

CEMEX offers an example of how the cycle works in practice.  The company wanted to improve sustainability so it organized an internal community around that purpose. The group contributed ideas about which aspect of sustainability to focus on. Ideas generated feedback as options were discussed. A judgment formed as it was decided that the community would spearhead increased use of biomass in the cement production processes,for improved financial and environmental sustainability performance.

The cycle was repeated to arrive at judgments regarding what improved performance would mean and how to assess it, identify the top-performing plants, and then share best practices. Videos of best practices were produced and distributed.In five weeks,the company achieved a 5% increase in the use of alternative fuels. Prior to CEMEX’s shift to a social organization, the same result would have taken two years’ worth of work. New procedures would have been distributed in thick binders that people had no inclination to read.

Importantly, communities need just the right amount of structure. Predefined processes or too strong an executive presence within the group can stifle participation.  But some structure and guidance is needed to ensure that the purpose is served. And there must be structured processes outside of the group so that ideas that emerge are not ignored.

Fostering mass collaboration externally among customers can create value in other ways, by sweetening a company’s value proposition and bringing in new business. Two examples: 

• Procter & Gamble’s social platform “Being a Girl” offers this customer segment a community for sharing experiences and provides P&G a window into their concerns and opinions. 

• Charles Schwab wanted more business from frequent traders, who crave information. But regulations prohibited the company from supplying it. So Schwab set up invitation-only communities for traders to exchange ideas and information in a safe environment. As a result, participants traded more and brought new customers into the group, generating revenue. 

“Peer-to-peer interaction among customers can become a very important aspect of your company’s value proposition." - Mark P. McDonald

Mass collaboration can be leveraged in multiple ways. 

There are at least six different ways that social organizations can leverage mass collaboration behaviors for business gain: 

1. Emergent structures. Groups’ shared understanding leads to the identification of how things work. 

2. Collective intelligence. The organization’s collective knowledge can be leveraged across silos to tackle common problems. 

3. Expertise location. Socialtechnology allows companies to find hidden sources of expertise among its talent. 

4. Flash coordination. Social media allows ad hoc SWAT teams to be rapidly assembled for addressing sudden problems. 

5. Relationship leverage. This is the most important aspect for moving beyond social media marketing to a social organization. Executives can promote mass collaboration by telegraphing that it is okay to share and collaborate outside of one’s team, brand, and even organization. Companies that simply put the tools out there in a “provide and pray” mode but don’t set the tone from the top often fail to achieve meaningful results. 

6. Interest cultivation. Common interests can bring groups together. Through collaborative communities, SuperValu stores in beach towns found they faced more challenges in common with each other than with their regional peers, which allowed for the sharing of solutions.

A specific approach can help an organization become a social organization.

Dr. McDonald’s book The Social Organization explains the approach for transforming into a social organization.

It starts with vision. Vision helps the organization see how the transformation will support the organization’s goals. The vision leads to definition of an organizational strategy. Strategy, in turn, helps to identify the purposes that will unify the collaborative communities.

Establishing the right type of purpose to motivate and focus participants is of the utmost importance. It shouldn’t just serve the company but must also provide incentive for people to join and contribute.

Guiding communities so that they stay on track in terms of participation, purpose, and performance is critical as well.

Becoming a Social Organization Starts with Vision 

Vision 

• Understand the nature of mass collaboration and its unique value.
• Assess organizational goals, challenges, culture.
• Articulate how mass collaboration can contribute to business goals.
• Craft and communicate the vision. 

Organizational Strategy

• Select which collaborative communities to pursue.
• Manage the portfolio of possible community projects.
• Justify community projects.

Purpose 

• Define key participant groups.
• Define purposes that will motivate participation.
• Develop a flexible purpose roadmap.

Launching the Environment 

• Deliver a meaningful experience.
• Create a productive collaboration environment.
• Actively engage participants.
• Set engagement targets as activity goals.
• Provide the right amount of structure.
• Foster the required ecosystem.
• Build upon the right technology. 

Guiding the Community 

• Sponsors guide from the middle.
• Nurture purpose for continued value.
• Guide productive participant behaviors.
• Allow for new ways of working.
• Provide resources to encourage new directions.

Adapting the Organization

• Finance fosters new attitudes toward investment.
• IT provides solutions, not platforms.
• Legal protects communities and doesn’t squash them.
• PR helps promote community collaboration successes.
• Senior executives and the board establish a culture of community collaboration.


OTHER IMPORTANT POINTS

Social media readiness? Assess your organization’s social media readiness at: www.gartner.com/socialreadiness. You will receive a report with your results, along with instructions on how to improve your readiness.

Additional resources. Find more information about The Social Organization at various social media sites:
— Twitter: #TheSocialOrg, @BradleyAnthonyJ, and @markpmcdonald.
— Facebook: The Social Organization.
— Blogs: Harvard Business Review: Anthony Bradley and Mark McDonald; Gartner Blog

BIOGRAPHIES
Mark P. McDonald, Ph.D.
Managing Director, Digital Strategy, Accenture; Co-Author, the Social Organization
Mark McDonald is a Managing Director and Digital Business Lead in Accenture’s Management Consulting practice, which helps clients to strategize, architect, and innovate to create value and revenue from digital capabilities. He has responsibility for digital business strategy and architecture in North America.

In the recent past, Mark was a Group Vice President and Fellow at Gartner, where he was a member of the Executive Programs Leadership Team and Head of Executive Programs Research. 

He is the author of The Digital Edge: Exploiting Information and Technology for Business, The Social Organization: How to Use Social Media to Tap the Collective Genius of Your Customers and Employees, and eProcess Edge: Creating Customer Value & Business in the Internet Era.

Mark was named in the Huffington Post as one ofthe 100 mostinfluentialtechnology bloggers. He is a contributor to a number of publications, has lectured at Oxford University, and currently teaches  courses at Columbia University and the University of Wisconsin Business School. 

Mark graduated from Colgate University, with Honors in Economics and Political Science, Trinity College, Hartford CT with a Masters in Economics and International Finance, and TU Delft with a Ph.D. in Technology Policy Management.

Angelia Herrin (Moderator)

Editor for Research and Special Projects, Harvard Business Review 

Angelia Herrin is Editor for Research and Special Projects at Harvard Business Review. At Harvard Business Review, Herrin oversaw the re-launch of the management newsletter line and established the conference and virtual seminar division for Harvard Business Review. More recently, she created a new series to deliver customized programs and products to organizations and associations. Prior to coming to Harvard Business Review, Herrin was the vice president for content at womenConnect.com, a website focused on women business owners and executives.

Herrin’s journalism experience spans twenty years, primarily with KnightRidder newspapers and USA Today. At Knight-Ridder, she covered Congress, as well as the 1988 presidential elections. At USA Today, she worked as Washington editor, heading the 1996 election coverage. She won the John S. Knight Fellowship in Professional Journalism at Stanford University in 1989–90.