Expert Interview with Christoph Schmaltz on Social Business & Collaboration



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About Christoph

Senior Consultant at Headshift | Dachis Groups

Christoph is Senior Consultant at Headshift | Dachis Group, the international social business consultancy.
He creates and executes social business and social media strategies primarily for global professional services, legal and financial institutions. He also oversees the development and implementation of various social software platforms and provides advice on transition and adoption strategies.
Christoph studied International Information Management and gained practical experience at a management consultancy, Siemens and the United Nations.

On Twitter: @christoph and visit the Headshift website


How has collaboration changed in the age of social media?

Over the past years, people have come to depend on email as the main collaboration tool. They are conditioned to use it for everything – private communication, public discussions (think the infamous cc functionality), newsletters, notifications, and content collaboration. In the absence of adequate tools that could cater for most of the above in an effective way, we have fallen victim to our own email inbox. We hate it, but cannot live without it.

Have you ever imagined creating Wikipedia using email and document attachments? Creating 20 million articles, hundreds of millions of versions and discussions? It is impossible, and that is why Wikipedia is based on wiki software – an editable website that tracks all the changes done by different authors and lets them easily go back and forth in the version history. Many companies have implemented wiki software to make content collaboration easier and more efficient. In the past few years we have also seen the rise of more sophisticated enterprise collaboration platforms that combine wikis, blogs, social networks, micro-blogging and other social tools to better connect a company’s workforce. The better connected employees are internally, the better it is for the company and its customers.

Looking beyond the firewall, we are seeing new collaboration methods emerging. For example, R&D heavy companies have started outsourcing parts of their R&D function to specialised external parties. They have recognised that their own department does not scale too well and that it can be cost efficient to seek outside support. This open innovation approach can work for some companies but not for others. Another example is the collaboration between a company and customers. Some companies are actively seeking ways to co-create new products together with their customers or improve existing ones. The idea is to tie customers closer to the company and turn them into brand ambassadors. If customers feel they have ownership over a product, they tend to market it to their network on behalf of the company.

Should there be a solid ROI attached to every social business initiative or are some benefits (such as deeper engagement) just too ‘soft’ to measure?

The ROI question has been fiercely debated since the start. Many people try to ignore the ROI question by asking what the ROI of the telephone or turning up for work would be. Others say that we need to come up with different methods for calculating ROI by introducing the concept of ROA (Return on Attention) or suggesting calculating opportunity costs (Return on Ignoring).

However, all this talk will not convince decision-makers. The ROI question is valid and cannot be ignored and I argue that the impact of social tools can be and should be measured.

Here are the four key items that are important for coming up with a business case:

Measure the right thing

Social tools can improve communication and collaboration between people. How the heck do you measure that? The answer: You don’t, because it is not a business objective. Improving time-to-market, increasing productivity, reducing production cost, developing talent are business objectives. Better collaboration, deeper engagement are just catalysts for achieving certain business objectives.

Benchmark

Any business case needs to take the current and future state into account. Otherwise, how do companies know that social tools are better than traditional tools? Saving £200K using social tools may sound a lot, but comparing it to savings of £500K using traditional tools would put the ROI into a totally different light. That also means that companies need to come up with an ROI calculation for traditional tools, which is interesting because most of them have not done it.

Cost-drivers vs. cost benefits

This is an obvious one, but still worthwhile to point out. While we mainly discuss how to assess the benefits of tools, it is important to compare them with cost drivers. There are obvious ones like license fees, people working on the initiative but also initial dip of productivity if new software is introduced.

KPIs (business vs. community)

Some business objectives can be measured directly in hard currency. Others need to be measured using proxies or estimation, especially when it comes to unstructured processes. This is not always easy. That is the reason why many turn to metrics that can easily be measured like number of documents, comments, likes, followers etc. However, they are pretty much meaningless. These metrics say something about the health of a community but do not help in assessing the business impact.

You’ve said that simply getting a presence on the social web will do little for a business. What do you mean?

In the past few years, many businesses have decided to launch a Facebook page, Twitter account, YouTube channel or similar. With their traditional mindset of how marketing and PR worked in the old days, they did not see much difference between these new channels and other communication channels like email newsletters, corporate website or marketing brochures. They ticked the boxes and tried to move on.

For businesses to be successful using social media, they need to provide value to existing and prospective customers. But often companies confuse the value that they get with the value customers get. Companies need to get real: no one is interested in marketing messages. If a company wants to be on Facebook & Co, it needs to have a plan. Why is it there? Who does it want to talk to? What can it offer? How does it offer value? In the end, that is what business is all about, delivering value!

You also talk about moving from a B2B or B2C perspective to a P2P perspective. Why is that important?

P2P – People to People. Business has always been about people. We do business with people we trust. Building this trust needs time, the right attitude and the right tools. In the age of industrialisation and mass production, none of these are sufficiently available. Companies focus heavily on specialisation and process optimisation sacrificing the people aspect. It is all about the company, not the individuals. And where it is about individuals, it does not scale very well. That is why we have highly optimised but dehumanised businesses.

Implemented correctly, social tools enable businesses to combine both process optimisation and trust at scale. It is not necessary or desirable to only rely on call centres to shield away from customer complaints. Social channels allow employees to be closer to customers and provide quick and efficient support. HR departments can reach more candidates using Facebook or other networks.

Having traditionally outward-facing functions interact with the outside world with the right attitude and tools is only the first step though. The true challenge for businesses is to acknowledge that even traditionally non-outward-facing departments should be able to connect with a company’s customers and clients. Why should a product engineer not be able to listen to what customers have to say? Why should a BA graduate not be allowed to talk to an associate or even partner at a firm he thinks about applying to? Using face-to-face meetings, telephone or other traditional means simply does not scale. Social tools do!

For many companies, there seems to be a wall between external social networks and internal ones. Can the two come together?

In some instances this is already happening. The general idea behind it is to reduce friction. For example, some solutions offer the possibility to connect customer communities with a company’s internal collaboration platform. A question raised by a customer on a company’s customer community can be pulled into the internal network and discussed by employees. The right answer can then be posted back directly into the customer community. Another example is LinkedIn. It offers a badge that companies can put on their recruitment pages. If a user visits the page and has a profile on LinkedIn, the badge shows immediately who he knows at that company.

There are other examples where it makes sense to connect the different web properties and networks. Some are still in its infancy others non-existent at this point. For example, why are many company websites completely disconnected from internal networks? Imagine, associates and partners of a law firm could collaboratively draft and discuss a thought-leadership piece on the intranet before posting it on the company’s website making one click. Or why do companies create separate alumni networks using other technology than the ones that former employees used while being with the company?

What’s next for social business? Where are things going?

We are only at the very beginning of something new. The social business theme will grow and mature but with lots of bumps in the road.

Companies that have experimented with social tools in the past have experienced some of these bumps already. They realise now that simply implementing technology does not always yield direct business benefits. Other companies have seen their reputation shattered by customers voicing their discontent using social media. Other companies had to fire employees because they misbehaved in social channels or faced a security scare due to comprised systems. Failures are to be expected and part of the learning process. Often, they happen because of a technology-centric view, inadequate business culture, false expectations or inexperience. Some failures can and will be avoided as we learn more.

The most important and painful revelation for companies will be that technology is not the key differentiator. As strange as it may sound, this is not to say that technology is not important! We have seen the rise of social technology and are now witnessing the advent of mobile technology and cloud computing. However, will we still be talking about Facebook, Twitter and others in five years? Who knows? Who cares? Technology will come and go, but what will stay with us is a different approach to how companies do business.

Changing this approach is hard work and will not happen over time. Today, there are many traditional businesses using social media but very few if any true social businesses. For this to change, the social business theme will need to become a management discipline. The main question for CEOs should be: how can my company thrive in a connected world? CEOs must not leave the answers to IT vendors, marketing spin-doctors or hype-riding consultants. They must lead the change.

Once CEOs realise that the connected world does not allow business as usual, we will see proper transformation projects rather than tactical approaches to social like implementing an enterprise collaboration platform or establishing the company’s presence on various social channels. CEOs will continue to set out visions for their companies but the strategy for how to achieve that vision will look differently than in the past. We move from business strategy to social business strategy. The talk about adapting corporate culture and changing organisational structures becomes serious and actions follow.

These are very exciting times both for companies and customers. Companies need to change or their customers will change them.

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