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The Impact of Social Networks on Organizations and Leadership
Business Contact, management, 224 pages, February 2010
Connect! describes how companies often neglect social networks despite the increasing impact networks such as Twitter and Facebook have on our personal lives. When organizations do manage to incorporate networks into their strategy – what the author calls ‘Connected!organizations’ – they are often surprisingly successful. This book aims to assist managers and leaders who see the opportunities, but lack the knowledge and experience needed to make a fundamental change. The author focuses on the cultural, organizational and strategic challenges that accompany social networks, rather than on technical aspects or temporary trends. The book consists of two parts: Part 1 describes the development of social networks, from big (macro-economic level) to small (individual level). Part 2 offers case studies of the use of social networks in areas such as marketing, business development and customer services.
Part 1: Connected!world
1. From pyramid to apparent chaos As we leave the industrial age and enter a new era, many are confused and anxious about the impact of the digital world. The hierarchic arrangement of knowledge and capital needs to make way for the connected!world, in which the boundaries of time, space and money no longer exist. Collectiveness is the key: collective expression (people present themselves in different virtual identities); collective creativity (to control the endless stream of information); collective productivity (people can work together in spite of geographic, ethnic and cultural boundaries); collective power (through unlimited choice) and endless collectiveness (the possibility to connect with and react to any one, any time, any place, through any kind of medium).
2. The rise of social networks The Internet started out as an enormous pile of relatively static and unconnected information. Web 2.0 shows the real opportunities: people are able to take from and add to an endless stream of ever-changing and open content. They build their virtual identity and influence each other through interest groups, profile sites, communication platforms and personal websites or blogs. It’s here that people share, produce, play, meet and create, and it’s here that companies can interact with their customers on a personal level.
3. Digital natives and digital immigrants The connected!world divides society into those who pioneer and swiftly adapt technical developments (digital natives) and those who don’t (digital immigrants). For natives the Internet is merely a means to communicate, since being connected has become a necessity. As a result they value sharing (even of intimate personal information), contributing (to society as a whole) and the freedom to intertwine their personal and their professional life. Immigrants follow in the footsteps of the natives, and by doing so they turn the new and unusual into mainstream.
Part 2: Connected!organization
4. The characteristics of a Connected!organization When people unite themselves in social networks they are able to mobilise a force greater than any company can achieve. This shift in power results in a more following and facilitating role for companies, rather than a leading one. Public opinion can make or break a reputation and demands transparency and accountability. A common but counterproductive reaction is turning inwards, e.g. denying employees access to social networks. In order to stay or become successful, companies will have to change into connected!organizations. This means authenticity, transparency, facilitating, giving attention rather than asking for it, trust (in both customers and personnel) and cooperation.
5. Connected!leadership: the required strategy and leadership style The connected!organizations asks for a new kind of leader, one that has the skills and attitude of a ‘guild leader’ in World of Warcraft: the ability to recognize and combine the strengths of others. The connected!leader facilitates rather than leads: he/she offers a shared global vision and builds physical and virtual networks where people in and outside the company can exchange thoughts. A connected!leader supports ownership, which requires trust in employees and investing in the development of their skills in the use of social media. Top-down leadership makes way for an organization in which connected!professionals are encouraged to be critical (of themselves and others) and have room to develop new initiatives in a transparent environment.
6. On the social network strategy Most companies are still exploring the possibilities of the digital era, while their employees experiment with social networks without a company strategy. A network strategy would result in a virtual identity, with which companies can communicate with their network of employees, suppliers, customers and any other interested parties. The creation and development of such an identity is hard, especially for digital immigrants: they are amazed by the candidness and hard-core transparency of digital natives.
The open character of social networks scares a lot of leaders when in fact they are expected to set the example. This role can be achieved with a little courage and some common sense.
7. Connected!business: social networks and business models The digital era forces companies to define their core business and unique selling points so they can create a virtual identity. They need to know their additional value to find their ‘blue ocean’. When they find it, they can build a community and even profit from crowd funding: a new business model in which fans contribute to the development and production of goods. Strategies around social networks are seldom successful. This is mostly due to the fact that companies develop these strategies without the input of the target group, which is contrary to the idea of a community. The key is to build trust, by being transparent and authentic, so people will want to connect. And it requires the courage to fail and try again.
8. Collective passion: social networks and the development of products and services Passion is an important building block of social networks: people connect to others who share their interest. Individual knowledge put together can create a powerful platform. By opening the dialogue with their customers companies can tap into an enormous source of knowledge and creativity: ‘the wisdom of crowds’. Social networks will change the way companies conduct consumer surveys and product development; instead of turning to their employees, companies will consult their clients directly: crowdsourcing. This is only successful if the crowd is committed to the product and/or the company, and that can only be achieved if the company is committed to the product – when it is both producer and user.
9. Social networks and HRM Social networks can change HRM – traditionally an inwards focused department – dramatically: appraisal will (also) be peer-to-peer instead of top-down, function profiles can be defined by using crowdsourcing and companies can build ambassador networks: people who are committed to the company and will activate their own networks to help find the right candidate for a job opening: e-recruitment.
These developments require an overall change in attitude in a company: leaders have to set an example and hire digital natives who can contribute to the process.
10. Social networks and marketing Mass media has enlarged the distance between brands and buyers. Social networks change that: they bring customers close enough to touch. In a connected!world there is transparency: consumers know it when a product doesn’t add anything to their lives. They will decide the value, not the company. And they will share their opinions: potential buyers base their decisions on online peer reviews (‘social shopping’). Marketing changes from shooting blindly at a crowd into creating meaningful relations with individual customers. The author pleads for ‘conversation managers’ to ensure the commitment of target groups. Companies also need to work on their authenticity and trustworthiness to survive in an overcrowded market.
11. Social networks and customer services Peer reviews make or break a company; they can even lead to crowd rage, which will destroy any company. To prevent that, companies need to show customers that they listen to their complaints and act on them. Initiatives like ‘Web care’ or ‘Web relations’ sometimes miss their purpose – it’s important to monitor the public’s reaction and to integrate the findings in the organization as a whole. It’s counterproductive if a complaint is not answered right away, or when no actions are taken to do better in the future. Companies need to be ready before they venture out into the virtual world. **
Press on Connect! ‘Well documented, Lanting focuses on managers and decision makers with strategic advice and practical tips.’
‘Anyone who still believes deep in his heart that social networking is nothing more than a hotbed of digital loitering will do well to read Connect!. [...] What’s more, he has a sensible outlook on things and gives good tips.’
TIJDSCHRIFT VOOR MARKETING
‘With the examples in Connect! Lanting has given us an insight into the new, often still unknown laws of social media.’
‘Connect! gives a clear picture of what steps an organisation should take to make the transition to – and with! – social media.’
‘An apt introduction to the world of social networking and its impact on organisations.’
Menno Lanting works as a strategist and leadership expert with the boards of various organisations. As an associate he is also affiliated with the leadership institute De Baak and a number of business schools. Themes on which he focuses on are: connectivity, executive development, marketing and business innovation. In this way he supports organizations in staying connected with the changing world. Lanting brought together his views on these themes in the award winning bestseller Connect! He builds on this philosophy in Everybody CEO.
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