“Marketing in the social era does start to look a lot like falling in love, following an arc of romance, struggle, stability, and commitment.”
How To Move Away from the Industrial Age Company Model - Forbes
If Social Business is really transforming the way we do business why are most of the stories and cases out there focused on changes to a single business function like marketing, human resources, or customer service? Shouldn’t it act as a change across several of these functions, or for that matter will these functions go away or change so fundamentally that we can no longer tell them apart?
It may appear to be a fine distinction but yet a very important one. Transforming a business process may involve one or two functional silos like sales and customer service. Transforming how a company is organized on the other hand asks use to review basic question of how a firm should operate. It asks if we need separate business functions to do production, distribution, marketing, or sales.
I read author, thought leader and the ‘female James Bond for Innovation’ Nilofer Merchant’s great five part series on Harvard Business Review, Rules for the Social Era, that asks the fundamental questions of why organizations are designed the way they are. In particular, she refers to how organizations still operate according to Harvard University professor Michael Porter’s Value Chain model, a classic business strategy definition of of how companies should be organized to determine their market competitiveness.
“Social” changes every part of the business model
Social era business models, says Nilofer Merchant in her article, “Stop talking about social and do it,” need to keep up with “fundamental and irrevocable” changes like these:
Via Harvard Business Review
“Collaborating with people through shared purpose creates advantage because it allows everyone to work towards a shared goal. When people know the purpose of an organization, they don’t need to check in or get permission to take the next step, they can just do it… alignment happens without coordination costs.”
Nilofer Merchant, “Rules for the Social Era” (Harvard Business Review)
Does Porter's value chain still work in the social media age?
An provocative piece in the HBR blogs today in which the author contends that Porter’s value chain no longer works because of the impact of social media.
Whilst it is an interesting piece, I can’t agree with it’s central hypothesis. The value chain is descriptive of an industry/company, and can be used to analyse where you are spending your money (and where you should be spending your money), and where you could bend or concentrate your capabilities in order to deliver the product you intend.
In the past, this did tend towards providing economies of scale and cost efficiency, but only because firms that did this type of analysis operated in those types of markets. If your business was in creating bespoke items, then your value chain is always likely to be different to a mass-market producer.
Social media and technology advances will undoubtadly cause a change in the value chain of these mass-market producers, but this does not negate the value of the model as an analytical tool.
Have a read of the orginal article, and let me know your views.
Culture Trumps Strategy, Every Time
Nilofer Merchant is a corporate advisor and speaker on innovation methods. Her book, The New How, discussing collaborative ways to have your whole company strategize, was published in 2010. Follow her on Twitter @nilofer.
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