Nonlinear Thinking

On Becoming a Social Business

Call it the tipping point, the moment of truth, a watershed event or any other synonym for when things have arrived at a point of irreversible, no-going-back, change.  Is 2013 going to be the year when social media truly becomes social business and social business morphs into business as usual?

Probably not.  Reams of data suggest that most companies are using social media.  Most of those are still really just dabbling.  Truly embracing social media as a core element of business going forward requires a belief and commitment that is still difficult to find in companies with more traditional business models and a bias towards the tried-and-true.  But with proof points on the efficacy of the practice/process/technology/culture of social media becoming more and more plentiful, it would seem that the more programmatic embrace of social media is coming closer to a need-to-have more than a nice-to-have.

The concept of a “social business” is still probably nascent enough that there remain a number of definitions running around.  In a recent report from Altimeter Group, Charlene Li and Brian Solis outlined the difference between a social media strategy and a social business strategy:

A social media strategy lays out the channels, platforms, and tactics to support publishing, listening, and engagement. A social business strategy is the integration of social technologies and processes into business values, processes, and practices to build relationships and spark conversations inside and outside the organization, creating value and optimizing impact for customers and the business alike. The most important criteria for a successful social business strategy are twofold: clear alignment with the strategic business goals of an organization AND organizational alignment and support that enables execution of that strategy.

Social media broadly permeates society (perhaps too much!) and that means it permeates business operations on all levels.  Ad hoc social activity runs rampant across the enterprise so it stands to reason that sooner or later, every company will want to formalize and harmonize these activities into a coherent strategy and plan.  Social business technologies help people connect, communicate, and share information and, whether informal or formal, use of those technologies allow companies to respond more quickly, take advantage more easily, and create competitive advantage.

Companies have historically tended to demonize those things that impact their business but remain beyond their control.  Though it may be stating the obvious, social media is one big, fat dynamic that is altering the playbook for business and not just in the marketing discipline.  De facto, every business today is a social business; they may just not have internalized it yet.  Possessing a strategy is merely the first step in the formal embrace of social.  That way, all those “Likes”, “Friends”, “Links”, and “Follows” can mean something more than a distraction.

Along those lines, here is a video from GE on their progression towards becoming a social business.

 

 

 

The Inevitability of Digital Marketing and the Digital CMO

A favorite debate focuses on the ascension of digital marketing over traditional marketing in today’s marketing model. Too many companies, even in the technology sector, still seem unable to grasp that such a transformation is taking place.

Perhaps the issue is that, even now, spending on analog/traditional marketing continues to exceed spending on digital marketing by a significant ratio according to Gartner Group’s 2013 U.S. Digital Marketing Spending Survey.  Based on the survey, average marketing spend as a percent of annual revenue, across all industries, is 10.4% while digital marketing spend is 2.5%. 

It should be noted that analog marketing tactics continue to be more expensive than digital options – media advertising being just the most obvious example.  Had the survey been broken down between B2C and B2B companies/industries, my guess is that analog and digital spending would be on a more even spending arc.

A related trend - how the advent of the digital marketing technologies that are reinventing much of the marketing model have altered the dynamic between CMO and CIO – is also highlighted by the results of the survey.  The CIOs of those same companies have seen their budget decline to 3.5% of annual revenue and with digital marketing spend at that 2.5% level, parity in technology-related spend seems not too far away.

In fact, in a 2012 report, Gartner predicted that by 2017, the CMO's technology budget will exceed the CIO's.  Pretty much every business should broadly consider itself a digital business but, right or wrong, marketing has emerged as the de facto owner of digital.  That makes the CMO responsible for driving the organization’s digital transformation, which clearly is built on many of the emerging technologies that are changing the conduct of business – mobile, social, cloud, SaaS/PaaS/IaaS.

SaaS and cloud technologies have had much to do with the changing balance of power between the two functions.  The ability to bypass the CIO organization to access key marketing technology platforms/solutions with ease in the new environment allows marketing leadership, or any other functional leadership, to avoid the traditional IT development/procurement queue and execute much more quickly on critical initiatives.

This would all seem to set the stage for the emergence and confirmation of the digital CMO, a marketing leader that not only recognizes the inevitability of this transition in the marketing model, but embraces and builds an organization to take greatest advantage of the new digital/social/mobile media.  Marketing strategy is still marketing strategy.  It is the tools, technologies, and channels that have been disrupted.  If there is a crossing of the Rubicon occurring in marketing today it is probably better to start thinking and acting digitally now than learn in some harder, and perhaps more final, way.