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Why the CBA Isn't Banking on Facebook

Why the CBA Isn't Banking on Facebook

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Published by iGo2 Group
Facebook is an indirect and a direct threat to many businesses, if it is not viewed and used correctly. (From the iGO2 Group Blog). http://igo2group.com
Facebook is an indirect and a direct threat to many businesses, if it is not viewed and used correctly. (From the iGO2 Group Blog). http://igo2group.com

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Published by: iGo2 Group on Jun 18, 2012
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12/03/2013

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Articles from iGo2 Group
Why the CBA isn’t Banking on Facebook
2012-06-19 08:06:43 WalterA
Dion Hinchcliffehas a prescient view of the transformational power of new technologies in the enterprise,cloud, mobile and social being amongst the key ones. His recent post “Should companies drive their traffic to Facebook?” caught our attention because it articulates something we’ve said in many ways andgives us some new hints as to how to again position our perspective, which is aligned with his.In short the answer is
No
”. We strongly believe in Hinchcliffe’s conclusion: “
it’s unwise for businesses touse Facebook naively when organizations can easily create their communities of their own and control thedata
.” But there’s more.Facebook is an opportunity and a threat to commercial enterprises, and it’s a threat on at least two major fronts – directly, and indirectly. It’s an
indirect
threat because if it’s used in the absence of a socialstrategy then ultimately the self-inflicted damage may prove fatal. It’s a
threat because it’s apowerhouse on every digital front that you can imagine, and it might eat your business alive. Neither of these threats are, as yet, widely understood. And that’s why we were excited, and we admit to being
a littlesurprised 
, to see that the CEO of theCommonwealth Bankis sharply focused on these two issues.Commbank is Australia’s largest bank and one of the world’s most profitable and in the Top 100 brands of the world, so it has a lot to gain and a lot to lose.Putting aside the direct threat for now, the really big issue is the role of 
social business strategy
and theefficient and effective connection between communities of employees themselves and via communities of customers, future customers, past customers and other stakeholders.
A naive Facebook plan can jeopardize internal collaboration and shareholder value
We outline some of our reasoning in “Why the CEO thinking Facebook Fails the Enterprise and itsEmployees” – that thinking “Facebook” can lead toa naive use of Facebook, and an
underestimation
of the
change program
necessary to create successful internal communities.Hinchcliffe makes a very instructive point, which is that the “move to social” is following the same patternof 
simply replacing
a non-digital medium with a digital one as happened with email and the web and evendigital TV. That is, the new power of the digital media was crippled by a
mindset
of it being “just another channel”. How often have we heard that said in relation to social? And we wrote “Why social is not justanother channel” to try to convey the
limitations
of that mindset and to move past it.Understanding where Facebook fits is a matter of having an effective social business strategy. And this isnota matter just relevant for big consumer brands or Lady Gaga. Facebook is aweb, cloud, social,community, ecommerce, games, apps, technology, and business
phenomenon
. Its potential role shouldnot be ignored by any business. But the point is that to allow your business to become
captive
substantial risks
. Every business needs to have a socialbusiness strategy which allows it to capture its own
relationship data
across its ecosystem within thecontext that most of its customers spend most of their time
in ot her people’s online networks
. And of course a social business strategy ties all this back in to how employees collaborate and utilize thisrelationship data to improve the
competitive performance
of the organisation. It’s
this bit
which drivesinternal community strategy, and
through that 
how this in turn interacts with external communities andstakeholders. This is a use of social media but it is not social media per se and not a social mediastrategy – it’s a part of a social strategy with various social media and social technology components.
 
Ian Narev’s two Big Ideas – collaboration and social
You could say that the above are “big ideas” which are still taking root. But some senior executives –CEOs amongst them – really understand the power of this
transformation
. Telstra’sDavid Thodeyisone, and another isIan Narev, CEO of Commbankwho was quoted in aninterviewin the Australian Financial Review (June 8, 2012):he’s [Narev] stamping his authority on the two big ideas that dominate his thinking for thebank:
collaboration
and an
external focus
. Driving this strategy is the rapid uptake of digitaland mobile technology and social platforms that are changing the way people interact and dobusiness.‘We see a big opportunity here and we see an enormous strategic challenge,” he says.“Because if we are not willing to adapt
 
our business models to seize the opportunity andrespond to the challenges of this technology, we will get left behind. The next chapter is toreally drive the culture towards the customer and collaboration,” he says. “The big prize,above all, [is] realising what I would describe as the latent growth in that core franchise: retailand small-business banking.”So, he says, this means absolute focus on the customer and encouraging staff to be veryexternally focused. “Because, increasingly, our competition is from different places. Andexternally focused [doesn’t refer to] just foreign banks. It means technology companies,telcos, Apple, Google… Regardless of the names, whether it be Google or Facebook, theprinciple is the same: they have very high technology capabilities, very strong brand appeal,low legacy challenges. I consider that to be a real challenge,” he says.The latter is exactly the point we make about Facebook in our cameo piece pre the Facebook IPOFacebook IPO – Would you buy? A view from the land downunder ”, which highlights the
direct 
challengearising from the power of the platform.In essence the rest of Ian Narev’s challenge pivots on social and having
and deploying
an effective socialbusiness strategy and enterprise social networking. A key is working outhow leaders allow employees tosucceed in social business, and another is in the early stages absolutely understanding thedifferencebetween social media and social business. And last but not least the selection of the right social platformis critical, which means not being distracted by tools e.g. Yammer, and the populism of “social mediaexperts” as opposed to strategic thinking about social and the future of the enterprise and the coresystems architecture necessary to support the business goals.We said early in January this year thatsocial business was a sleeping giant which would stir in 2012, andit looks like the giants are awakening! With their awakening comes the realisation that these are massivecultural and enterprise challenges that need to be closely integrated and aligned with business goals andobjectives. Facebook is a Jupiter but you need your organisation to be the Sun! Let’s hope that the days of conference speakers naively stating that “
our strategy was to use Facebook 
are over 
.
Which other organisations do you know that are coming to grips with the big issues of social businessstrategy?
Please comment below.

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