The term social business was created to describe how companies can generate greater value by adding a social overlay. The first-generation social business was defined by Nobel Peace Prize winner Muhammad Yunus as a company dedicated to solving human problems. The term evolved to a second generation by the Dachis Group to incorporate a social element interconnecting the various business constituents including marketing, R&D, customer support, and suppliers. This second-generation meaning of social business is often tied to shared value and can encompass the use of social media tools.

In our book, The Pursuit of Social Business ExcellenceBrad Martin and I describe the social business as an environment that feels like a small town; people know your name, doors are left open, and the lights are on. For us, social business transformation was less about the use of technology to improve connectedness, and more about a mindset of collaboration and co-creation of value. Our ability to grow our business and delight customers was a function of culture, people, process, and, last, technology.

We found a number of specific markers that accompany and validate the social transformation progress. Business leaders should keep in mind that the purpose of collaboration is to improve execution velocity and delight customers. It is important to continually demonstrate the ability to drive sustainable growth and bolster customer loyalty and commitment that results from collaboration. Those markers include:

  • Pragmatic optimism. A social business defaults to “yes” and then rationalizes to the desired disposition. A bias for action with a positive mindset leads to an agile and change-embracing culture. There is no safety in the status quo. Optimism is often fueled by teamwork and collaboration.
  • Minimal layers. A social business is flat. The distance between an individual contributor and the CEO is but a few layers. In a social business, there is a direct line of communication between entry-level employees and senior management.
  • Leadership by example. All leaders and executives are socially engaged. If your CXOs are not social, your business is not social. Social executives are accessible, active listeners and connectors of the business, always seeking the best and fastest path toward progress and growth.
  • The best ideas win, independent of titles. Ideas and information flow horizontally, vertically, from the bottom, and from the top, throughout the business. Most damaging can be the highest paid person’s opinion (HIPPO) syndrome, whereby all the decisions are ultimately dictated by the biggest title.
  • Social and business process integration. Social businesses integrate social channels into their business processes and workflows. This means integrating social media networks into CRM solutions. A truly social business is one that integrates social networks and all of its contact channels into a single relationship management framework.
  • Adoption of gaming techniques. Internal competition is welcomed. This means social businesses embrace gamification to drive employee, customer, and business partner engagements. Gaming concepts, packaged into an overall social strategy, can unlock the full potential of the organization.
  • Safe environment. An idea or red flag from anyone can reach the CEO directly, without a middle man and without repercussion. The environment is safe and collaborative, where failures are viewed as part of the learning experience. Experiments are welcomed; innovation is not about better sameness.
  • Shared accountability. Social businesses share complete interdepartmental performance metrics as a means to foster collaboration. Social businesses extend performance metrics to customers and partners with connection to both people and products.

In summary, a social business is much more than a business that uses social media. Social collaboration success is more a cultural and philosophical achievement than technology adoption. Collaboration is hard work, but it doesn’t have to be complex work. In fact, collaboration can simply start with four words: What do you think?

Published on: Jan 28, 2014
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.