What Does it Take for Your Social Business to Succeed?

John Andrade    October 16, 2013

485788_10151635499872863_1276644685_nJeff Matt, owner of Victory Auto Service and Glass, located in the suburbs of Minneapolis, developed a thriving Facebook page with over 60% female fans, by developing personal relationships and trust, thinking like a customer, being friendly, and promoting the community.  In three years he opened three new locations.  How can other companies, big or small, replicate his Social Business success?

Gerald Kane asserts, in his article Social Business: Flat or Hierarchical? A Surprising Answer: “businesses most adept at using social media don’t have a strict hierarchy of roles. Instead, they push decision-making capabilities down to people who can better deal with conditions on the ground.”

oreo in the darkAn organizational approach like this can make a one week difference between the time it took a Fortune 200 company to generate and approve a 140-character tweet to respond to an online critic, and the roughly 10 minutes it took Oreo’s marketers to generate its groundbreaking 2013 Super Bowl tweet. Not to mention the difference in impact in their audiences.

Which types of organizations behave more in the way indicated by Kane?  Not the so-called flat organizations of the beginning of the Internet era, but loosely coupled organizations such as the military, education and religious institutions that, while deeply hierarchical, do not function like modern corporations.  Corporate leaders focus on communicating and enabling strategic objectives, and the leaders in the trenches are partially responsible for figuring out how to achieve them.

netflixThen, digital business models need to be strengthened, not only to capitalize on clear competitive advantages, but also to avoid missteps such as the ones incurred by Netflix, which cost them a 79% decrease in share price in the second semester of 2011.  Peter Weill and Stephanie L. Woerner, in their article Optimizing Your Digital Business Model, provide several examples of companies that have developed such models.  In a nutshell, a successful business model needs to have good content, customer experience, and platform, that exploit a sound market differentiation, just like Jeff Matt’s auto service does.

Lessons Learned:

  • Social Business needs to be part of a company wide strategic focus, and not a separate tactical effort.
  • Businesses ought to know and remember the basics: know your customer, establish a clear competitive advantage, and enable its exploitation in all fronts, not just the digital one.
  • Empower and leave the minutia to the people better suited to implement your strategy and achieve its objectives.

Web References:

Business Modeling in the Dynamic Digital Space – An Ecosystem Approach

How an Auto Repair Shop is Winning Female Customers With Social Media

Optimizing Your Digital Business Model

Oreo’s Super Bowl Tweet: ‘You Can Still Dunk In The Dark’

Social Business: Flat or Hierarchical? A Surprising Answer

The Executive’s Role in Social Business

Submitted by: John Andrade – SMBP student University of Waterloo. To contact the author of this entry please email johnandrad@gmail.com

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