State of Social: A Report Card for 2013.
At the outset of 2013, the “social” revolution is proving messy. Here’s a report card and some predictions for the remainder of the decade.
- SOCIAL COMPANIES ARE NOT SOCIAL. Our lead social efforts, led of course by Facebook, not only fail to grasp the subtleties of social but are among the least social companies on earth. Facebook, run with all the social finesse of an old-style oil company, has in the process not only doomed itself but damaged the social idea by its comprehensive failure to align that idea with its values and corporate structure (see 5).
- COMPANIES DON’T CARE. Major corporations have demonstrated an almost unbelievable level of disinterest in social. While most (80% of F500?) have finally got around to building a social network presence, the number of CEOs and other C-suite execs who are engaging personally in the social revolution is tiny. No-one rivals @rupertmurdoch’s dive into social. Barely a dozen more top CEOs have bothered to try. Opportunity here is indescribably big (see 6, 7, 8).
- LEADERS HAVE HARDLY BEGUN. The same is true in government. While many entities at all levels have finally developed a presence, very few leaders have grasped the revolutionary opportunities that have come their way. Newark mayor @corybooker stands out as unique. Member of Congress @darrellissa is close behind. @picobee has catalogued world leaders with Twitter accounts; very few give evidence of personal engagement, and almost all of it is stage-managed, like the “BO” tweets. Booker is the model for 2013.
- THE PRIVACY BOMB. The privacy/monetization interface remains unresolved and threatens to destabilize the entire effort. Social companies rely on user data to sell ads, one way or another. They assume that users do not much care. Users, for their part, generally lack the sophistication to control complex “privacy” controls. So risk goes up, and the perhaps naïve idea of social as a free service that would safeguard our stuff and treat us with respect has withered. Social-as-a-service, with fees, has – curiously – yet to be seriously tried. (It will come.)
- NO ALIGNMENT. The originality powering many of the myriad social products has yet to be matched by originality in governance and financing. Yet alignment between social as product and the values and structure of the companies that develop and host is crucial. A social enterprise or non-profit model is plainly appropriate. Yet the standard path has been IPO. This ridiculous disalignment will destroy the current leaders and offer a remarkable opportunity to the next wave.
- STRATEGIC SOCIAL WILL WIN OUT. It may be inevitable that the strategic significance of social in driving change through innovation will be resisted by organizations for whom old-style control issues are everything. The impact of social in aligning front-line employees and their own values with clients and potential clients suggests a concept foreign to the traditional corporation: that employee (personal) values and corporate values need to be related. It also offers a challenge to a core principle of the corporation: that the organizational boundary is sacrosanct, to be crossed only in the context of risk-controlled contractual arrangements. Social breaches that boundary. In the process, it offers the corporation the possibility of radical shifts in culture that will drive innovation and change. But it cannot do so within the context of the high-control mechanisms of the traditional functional organization. Strategic social offers high-value, high-risk change by aligning the organization with emerging markets and generations. Companies that find ways to harness these forces will drive ahead of their hidebound rivals (see 7, 8).
- CEO, C-SUITE, INCOMPETENCE. Drilling down into F500 social incompetence, we meet both defensive C-suite execs who hide behind generational barriers and consign social engagement to junior customer service and marketing roles; and the standard structure in which the CIO still reports through the CFO as if digital were the provision of typewriters and dictaphones to be supplied at the lowest cost. There is now no organization in which the CIO function is not central; the CIO is the closest collaborator of the CEO. Those who grasp this principle will win out.
- THE CIO CRISIS. The evidence is clear that very few CIOs are personally engaged in social. They need to be replaced. This is nothing to do with Klout scores (which I continue to regard as ridiculous), and everything to do with fundamental competence. One of the virtues of functional management (it has vices) lies precisely in the fact that C-suite execs are experts in their fields. A putative CIO who lacks serious social competence should not be short-listed. One who is in position should be fired.
- SOCIAL NETWORKS WILL CEASE TO COMMAND ECONOMIC PROFITS. When the second wave of social networks moves into place, supplanting Facebook and some others (which may of course continue as profitable, if much less valuable, enterprises), there will be little economic profit to be made. While not all such organizations will be non-profits or mutualized – some will certainly be profit-seeking social enterprises, and others will have new models we cannot predict – the combination of low entry barriers and the utility function of social will ensure that the thrills of the early IPOs, some of which will lead to large capital losses, will not be replicated. As social becomes seriously useful, integrated into communications and decision-making in all enterprises and disrupting as well as innovating in the process, it will no longer have novelty value; and aside from niche markets there will be no economic profit for first movers.
- ECONOMIC VALUE WILL BE DELIVERED BY SOCIAL IN ALIGNMENT. The coming decade will see value of several kinds emerge from the meshing of social with increasingly accurate realtime translation software, transparent accounting systems, digital health, deep-rooted innovation systems that are socially driven across organizational boundaries, the workings of government, and other seeming disparate efforts. Before decade’s end each of these will be deeply integrated into next-wave social, delivering extraordinary value that is integrated into major economic engines and not supplemental to them.
In one word: brilliant synopsis. Companies continue to use social outside the enterprise as an extension of broadcast. They operate outside the network to manipulate messages. Like Facebook, enterprise vendors who promote social networking software continue to network like it’s the Mad Men era.
Your 9th point is particularly insightful. Open source middleware, standards and cloud computing has reduced the barriers to entry for new social network technology. This might enable more specialized domain networks in the same way that it currently enables regional and national level social networks.
And, business and government will need to transform to engagement rather than broadcast. This means a disruption in business market share. The effects in government may be more profound. Participatory budgeting can scale through technology. Vested interested and “big money” may become more challenged to manipulate political processes.
It remains to be seen whether social can mature from an echo chamber for the previous medium (as in McLuhan) where the medium becomes the message where there is more substantial and engaging problem solving than we currently witness.
It’s mostly echo chamber now, but much less mature than the major social providers (and their investors) seem to think; a trial run like the old AOL and yet the stakes are now much higher.
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