Traditional Strategy Is Dead. Welcome to the SocialEra by Nilofer Merchant

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DeM Banter:  Still a bit frustrated that we still don’t seem to “get it,” we still hang on to the ways of the not so distant past…but that too shall pass…we need to embrace and guide the future.

When I say, “Social is and can be more than media,” people resist. It’s as if the two words (social and media) are now permanently fused together. But they shouldn’t be. The fact that they are joined at the hip in so many people’s minds means that marketing agencies are thriving — but that the rest of our organizations are not.

Social can be — and already is — more than Media.

The companies thriving today are operating by a new set of rules — Social Era rules. Companies like REI, Kickstarter, Kiva, Twitter, Starbucks — they get it. They live it. And to them, notions like distributing power to everyone, working in extended community to get things done, or allowing innovation to happen anywhere and everywhere are, well, ridiculously obvious. But too many major companies

 

— Bank of America, Sports Authority, United Airlines, Best Buy, and Walmart to name just a few — that need to get it, don’t.

The failing organizations around us — many of which I explore in my new bookwhich publishes today — continue to follow the operating rules and ethos of Traditional Strategy. They haven’t seen the obituary:

It’s helpful to call this new context the Social Era to emphasize a point: while in the industrial era, organizations became more powerful by being bigger, in the Social Era, companies can also be powerful by working with others. While the industrial era was about making a lot of stuff and convincing enough buyers to consume it, the Social Era is about the power of communities, of collaboration and co-creation. In the industrial era, power was from holding what we valued closed and separate; in the Social Era, there is another framework for how we engage one another — an open one.

Here’s the simplest way to define the Social Era. The industrial era primarily honored the institution as a construct of creating value. And the information age (inclusive of Web 1.0 and Web 2.0 phases) primarily honored the value that data could provide to institutional value creation. It allowed for greater efficiency to do the same things that were done in the industrial era. The Social Era honors the value creation starting with the single unit of a connected human. In this framework, powerful organizations look less like an 800-pound gorilla and more like fast, fluid, flexible networks of connected individuals — like, say, a herd of 800 nimble gazelles.

Companies cannot survive (let alone prosper) without recognizing that Social as a phenomenon can allow us to redefine our organizations to be inherently more fast fluid and flexible by its very design. Not by doing a little bit more, or slimming down a bit here or there, or by doing a few things a little bit faster. No. We will not tweak our way into the future.

Today, too many organizations that think their status as an “800-pound gorilla” gives them an edge are struggling to survive, let alone thrive. They underestimate social to their great detriment. They see it as the purview of two functions: marketing and service. It’s either “Like us on Facebook!” or “We’re so sorry you’re having a problem.” While a few have figured out that they can use social to listen to the market — sort of like putting a stethoscope to the market heartbeat — they have yet to figure out there is more to this Social thing.

So before we can explore the Social Era, we need to disaggregate two words — social is not always attached to the word media. Social can be and is more than marketing or communications-related work.

When we look at all the parts together, we can see how Social affects all parts of the business model: the way an organization creates, delivers, and captures value. They also shift the ethos by which we lead and work.

The #SocialEra ebook releases today, and discusses this shift in focus, which has profound implications for business and for how all of us work and lead. Regular readers of HBR will recognize parts of the thesis in this post; the idea has developed with your input, as these ideas were first shared in a five-part series. Rather than waiting 15 months to publish a physical book, I and my publishers at Harvard instead chose to offer an ebook to continue the conversation in a timelier fashion. I hope you’ll join me both in reading the ideas, and exchanging ideas.

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2 thoughts on “Traditional Strategy Is Dead. Welcome to the SocialEra by Nilofer Merchant

  1. Interestingly, I had a course during my MBA back in 1996 titled “Knowledge Based Organizations” which put forward the idea that the future of business was in nimble, networked organizations. And now here we are! Unfortunately, T.S. was the core of the study and was repeated ad nauseum. That was because T.S.had worked for so many years, had gained a following, then it had been dissected, studied, broken down into its component pieces, and improved upon. The “networked organization” was a great idea, but there were not yet enough concrete examples to make it something of mainstream interest.

    10 years ago before Facebook, CSR, or Corporate Social Responsibility, was the means that large industrial enterprises would express (i.e. report) their “socialness”. Usually this was accomplished by publishing an annual sustainability report in addition to their annual financial report and then announcing the results with a press conference. Oh, how times have changed. Companies who have gotten it, shifted to publishing a single, integrated annual report several years ago and are engaging stakeholders much more frequently. Merchant is so right to exclaim that social and media must be not be permanently attached to each other.

    While enterprises had been dallying with being “social” over a decade ago, and a number of management gurus, most notably Gary Hamel, had been pointing out the shift in the competitive business model and “era”, the “social era” had not yet shown itself to be tangible, let alone dominant. Because it did not yet have enough substance, many industrial enterprises have ignored or negated it to their detriment. I am please to see that Merchant has put a stake in the ground indentifying that the tipping point has finally been reached.

    I am intrigued enough to want tol take a look at Merchant’s ebook. Has anyone else already read it? Recommendation?

  2. Roger… I need to get the book as well… good points, I struggle with what this means for big/traditional organizations that take a LONG time to make a shift…or big organizations that really don’t have a strategy to begin with…. not nimble, that’s for sure.

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