Social Business doesn’t mean what you think it does. And neither does E2.0

“Social Business” is not about technology, or about “corporate culture”. It is a sociopolitical historical shift that is bigger, broader and much more fascinating.

A new perspective is changing how we think about society, politics, interpersonal relationships, science, government and business. New approaches are emerging. Learning and self-expression are exploding. Values are changing. Leadership is changing. The economy is changing. Change itself is changing – it is accelerating and becoming the norm.

Business structures founded on command and control, automation and process are giving way to structures that are less hierarchical and more dynamic, designed to engage people’s hearts and minds to make a difference in the world. Business models of the past – some of which focused on exploiting resources – human, resource, financial or legal – are beginning to fail as we reach the limits of their sustainability (Umair Haque’s New Capitalist Manifesto is a very well written and brilliant description of these forces). The new successful businesses and governments are building, not destroying. Creating durable value that is greater than the cost (financial, societal, environmental and otherwise) of the resources they consume.

In the past most business value was derived from controlling land, resources or intellectual property (processes, technologies and patents). A “Social Business” is one that derives most of its value from the hearts and minds of people who work there and the people who buy from them. A social business’s first priority is not structure or process, but the aspiration and approach that engages those hearts and minds.

If the industrial revolution’s idea of a great business was one in which every role, process and activity was well defined and controlled by management, social business is one in which every employee and customer are aligned around a common purpose.

There are 2 shifts in thinking that are driving the move to “Social Business”

1. From Command and Control to Network Management.

We have maxed out what we can do with Command and Control organizations, and we’re learning to manage networks of capable people instead.
Social Businesses are beginning to recognize that we’ve fully milked the mechanistic, reductionist concepts that lead to command and control, and to go forward, we need a new model.

Let me put that into English – Since the dawn of civilization, most organizations – governments, military and businesses – have operated in a command and control fashion. Why? First, this was the only way to communicate at scale, and second, people lacked, or were thought to lack the competence and/or the will to operate independently toward the leaderships goals. The communication problem is rapidly disappearing (though it lingers), and higher levels of education generally have profoundly reduced the need for command and control, while the complexity of the world and need for speed have diminished its effectiveness.

Stuff is changing so fast that the rigid mechanistic structures are simply failing. It has actually become harder to be productive in a big organization – economies of scale are reversing themselves in command and control environments. And in these new organizations that are networks of capable individuals who have great communications tools, leadership emerges as more important than command structure. even if most people have never heard of John Holland and Complexity Theory (I’ve recently been reminded how obscure they still are).

Hierarchy, process and automation are returning to their proper place – as tools that support human efficiency and capability. Rather than the 20th century model of people existing to keep the processes running, we are now flipping it around so that processes exist to support us. Processes and automation amplify human capability. Importantly, there is another profound amplifier of human capability – and that is other humans! The focus on collaboration fueled by radically improved communication and the internet that William Gibson deliciously described as our “increasingly efficient, communal, prosthetic memory” is dramatically changing how we think about organizational structure, efficiency, learning and innovation – even if most people have never heard of Complexity Theory.

2. Business needs people and people need respect.

To do good work, people must constantly be scanning their environment, understanding and inventing solutions to problems. Command and control is not the best way to encourage or benefit from this – particularly as the organization grows large. Consumers (constituents, clients etc), similarly, are tired of being taken for granted, and also wish to be respected as the ultimate judges of your organization’s value. The same increase in talent, education and capability that makes networked organizations possible, means that the people themselves have thought beyond their occupation as a means to survival. They want more from it, and want to offer more to it.

Hence, your organization is now in the business of earning and maintaining the respect of your market and your team. Your team is useless to you if it is not well respected, and your market will simply walk away if it thinks you are trying to trick, cajole or manipulate it. Daniel Pink’s research shows that people, in order to be truly motivated in their work, require autonomy, mastery and purpose. Simon Sinek goes on to show how purpose is also key to market success. The common thread here is respect. Respect the purpose of your organization, respect the capabilities of your workforce, respect the attention and value of your customers.

Command and Control doesn’t allow for that kind of engagement. A strictly hierarchical organization struggles to engage and consider each of its employees. Executives miss many, many opportunities for insight and problem solving because they don’t know how or don’t value the contribution of their corps. Similarly, a company that is not maximizing the amount of engagement between its employees and the people they serve are walking away from the real value potential they have – which is to understand an audience, and share their perspective with it.

Social Business is one that recognizes that their mission is engaging hearts and minds to achieve excellence. Social Business is about respecting people.

Geeking out on the riff, or what E2.0 really stands for

Social Business is a reflection of a larger societal shift. Its tempting to draw analogies between what is happening now and the Enlightenment, which began transforming Europe in the mid 17th century and ran straight into the the 18th. The Enlightenment changed how we westerners thought. We went from norms of feudalism and mythology to democracy, rationalism and reductionism.
It brought us both democracy and the industrial revolution. Woah. It took a century or so, but it was a radical rewrite of how we think about who we are and how we live.
It was hastened on its way by the invention of the printing press, Newtonian math and science, Liberalism, and a number of philosopher scientists who were later excommunicated.

The enlightenment was characterized by an intellectual elite that saw the opportunity for a better world. It gave us the tools to re-explore the world from a rational, reductionist perspective using scientific principles – predictable consequences of any action – to transform everything from navigation to technology and society itself. It was hastened on its way by the invention of the printing press, Newtonian math and science, Liberalism, and the work of philosopher scientists who were frequently excommunicated.

Rationalism lead to a massive diffusion and expansion of scientific knowledge, math and technology. in this mindset, the perfect system, the perfect business structure, was one where every variable was known, every detail calculated. Whether consciously or un, we tried to model our organizations after these ideals. When every variable was known, we would have complete control. Henry Ford capitalized (so to speak) on this principle with his famous assembly lines. Things became fast and consistent – a fundamental enabler of the industrial revolution and mass production which allowed for the creation of an educated middle class. [This TED talk which looks at how the invention of the washing machine lead to the modern concept of parenting, seems at first blush silly and then absolutely profound. Imagine if women in developing countries didn't have to carry water - but I digress (and you should too - the TED talk and water stats are worth seeing).]

Enlightenment 2.0, which we could argue is what’s happening now, has been catalyzed by quantum mechanics (you really can’t know it all, sister), complexity theory, and social media technologies, is leading us from the age of reason to the age of – emergence (?!?) – where we will start to understand that while we cannot predict or control what will happen, we can surf it. It is enriched by humanist thinking and a general increase in the global standard of living that allows people to care about determining their lives, rather than simply surviving. We are again seeing the rise of the polyglot polymath- the person who knows some science, some philosophy, some business, some politics and is taking control of producing their ideas. (Ben Franklin and Thomas Jefferson are as well known for their contributions to science and technology as to politics). This is a time when we are again inventing, acting, doing as well as learning. This will change the way we think and act as dramatically as the first Age of Enlightenment, though it may take as long to unfold. It takes a while to re-wire the human psyche.

Human behavior is one of the most non-deterministic, irreducible forces we deal with in day to day life. The Enlightenment respected that, at the same time as it created the paradoxes of command and control and mechanistic views of the world. We’re now able to come back and reevaluate the role of human complexity in society. Enlightenment 2.0 is causing Enterprise 2.0 to embrace complexity and human behavior.

A Social Business is a business that respects and profits from the complexity and unlimited potential of people.

The best is yet to come.

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