The document discusses the key differences between traditional businesses and social businesses. It outlines four key concepts: (1) Traditional businesses focus on transactions while social businesses focus on interactions; (2) Traditional businesses operate in a top-down hierarchy while social businesses operate as networks; (3) Traditional businesses act as gatekeepers while social businesses act as platform providers; (4) Traditional businesses operate in a B2C/B2B model while social businesses enable P2P connections. The document argues that merely having a social media presence is not enough and that businesses need to fundamentally change their mindset and operations to truly benefit from social tools and platforms.

1. From Traditional Business to Social Business
by Christoph Schmaltz
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2. When businesses ask for a social
media strategy, what they are
often really asking for is: Get me a
presence on Facebook, Twitter and
the like. The mantra of cultural and
organisational change that is
required in the social web seems
to ring hollow. To be fair, it is not
their fault. With a traditional
business mindset it is hard to see
why a presence on Twitter or
Facebook is different from the
corporate website. After all, these
tools can seem to be just another
communication channel.
When I talk to clients about the
social web and its impact on
businesses, I often use four key
concepts. These concepts seem
to help to explain the broader
implications of social tools and
why a mere presence on the social
web will have a very limited
business impact.
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3. From Transaction to Interaction
In the good old days traditional businesses produced a product
or service and the customer bought it. End of transaction. Over
the years, they have distanced themselves from their customers.
Traditional businesses live in their ivory tower from which they look
down on their customers. They introduced call centres to shield
themselves from customer complaints. Every so often, they
introduce a new product and market it heavily using print and
digital channels. Nowadays, they can also be found on Facebook
and Twitter talking about their new product. They produce it, the
customer buys it. End of transaction.
A social businesshowever, is all about interaction. It sees itself
on an equal footing with their customers. Of course, it still wants
their money. After all it is a business and not a charity. But a
social business listens to what its customers have to say. It is
eager to get feedback, both positive and negative. Negative
feedback is acknowledged and addressed in an honest and
transparent way. It sees it as an opportunity to co-create new
products with the help of its customers. A social business
operates in public and not from the heights of an ivory tower. A
social business does not simply sell products, it sells customer
experience.
Example
A customer of Zappos once tweeted that she had ordered shoes for her birthday. A customer representative got in touch with
her asking about her order number just to make sure that the shoes would arrive on time for her birthday. You think that is
difficult? Not for a social business. It is where its customers are and listens to what they have to say. It is all about interaction
and customer experience.

4. From B2B/B2C to P2P
A traditional business has successfully created a wall between its
customers and itself. Only particular departments are allowed to
interact with the outside world, for example Marketing, HR, Customer
Service. The rest of the business is shielded away from any external
distraction to ensure employees are productive. Humans work in a
traditional business. They have a face, but they can only show the
company’s face. Sorry, company policy. Nowadays, traditional
businesses have developed their own recruiting platforms. They also
have a presence on Facebook, where HR advertise for new vacancies
and post recruiting tips. They are really proud of this achievement. The
traditional business can connect with potential recruits on Facebook.
But actually, when they join they will see that Facebook is blocked.
Sorry, company policy.
A social business understands that people want to connect
with people and not with businesses. If customers are
looking for help, they want to talk to a real person, not a
company. A social business acknowledges and is proud to
employ many smart people not just in HR, Marketing or
Customer Service. It employs them, because it trusts them.
It wants the world to know about them and enables them to
connect to the outside world. That is why social networks
are open for everyone and people are still productive. A
social business manages by objectives, not by presence.
Example
Mary from the HR department posts new tips on Facebook, and not the HR department. A small but subtle difference. A highly talented
engineering graduate asks on Facebook what life is like on an oil rig in the North Sea. Mary has never been on an oil rig, but she knows
engineers who have. One engineer answers the question on Facebook, visible for everyone. It is John, not the company. People connect with
people, not with companies.

5. From Gatekeeper to Platform Provider
A traditional business clenches on to its old powers. It believes it
still owns all the connections between customers and partners. If a
partner would like to talk to another partner, he needs to go
through the company. It manages in order to survive. According to
a traditional business, shared knowledge is only worth half as
much. Better to control the gates.
A social business understands that today’s technology enables
anyone to connect with anyone, whether the business likes it or not.
The gates are open. A social business knows if it simply keeps
managing connections, it will survive, but if it facilitates connections
it will thrive. Hence, it provides a platform for customers and / or
partners. It is comfortable letting people discuss the business, its
products or completely different matters. It facilitates and does not
manage.
Example
Dell, a computer manufacturer runs a Facebook Page about Social Media for Business. Yes, Dell is not in the business of providing
social media services. But it uses the group as a platform to stay connected with existing customers and potential customers. Dell
provides more value than it can capture (in the beginning). That way, Dell stays in people’s minds. Dell may not always be the best
choice, but I bet, the next time a member of the FB page is asked for computer advice by a friend, he will also mention Dell.

6. From Hierarchy to Network
A traditional business has a rigid top-down communication structure. News
from the top is passed down through the ranks of the organisation. The
middle management is powerful as it acts as gatekeeper (see above). Open
and transparent dialogue between the top and the bottom of the traditional
business is difficult if not non-existent. Furthermore, technology provision in
traditional businesses have manifested in department silos. Few employees
know what other departments or teams are working on. Cross-departmental
connections are made in the cafeteria, at the water-cooler or in the smoker’s
corner.
Contrary to popular belief hierarchy still exists in a social business but it is
heavily supported by an underlying network. Communication flows are bi-
directional and cross-departmental. The middle management has lost its
power as gatekeeper and is now functioning as platform provider. It provides
a platform for the management and employees to communicate and
connect. Employees can see what other teams and departments are working
on. Increased visibility leads to better decision-making, improved customer
service, superior products and ultimately higher sales. At the same time a
social business also acknowledges that people connect with people not just
because of work but also interests. Therefore, it encourages employees to
form communities of interest or purely social groups. This creates stronger
bonds between employees which leads to lower turn-over rates. If an
employee does leave, they are more likely to stay in touch with colleagues,
not the business. Remember, people connect with people, not with
companies. (see P2P concept).
Example
By now, many organisations have or are in the process of implementing a social business platform which enables employees to
communicate with the senior management and also across teams and departments. Some of the most advanced and innovative
organisations that have adopted this approach can be found in the Social Business Council.

7. No doubt, more concepts exists.
However, I believe many of them
are part of the ones I have outlined
above, i.e. From Control to Trust
(B2B/B2C to P2P; From
Transaction to Interaction), From
Management to Open Leadership
(From B2B/B2C to P2P; From
Gatekeeper to Platform), From
Employee to Brand Ambassador
(From B2B/B2C to P2P; From
Transaction to Interaction).
If your social media strategy is all
about setting up a social media
presence, jump right in. It only
takes a couple of minutes to set
up accounts. There are gazillions
of tips out there telling you how to
increase your follower or “Like”
counts. However, if your social
media strategy is about business
impact, you need to go back to
basics. Understanding the key
concepts and the broad impact of
social tools on businesses, will
help to deliver value. In the end,
that is what business is all about,
delivering value!
This blog post written by me was originally
published on the Dachis Group Blog
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