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Social Business

Social Business Design: the intentional creation of dynamic and socially calibrated systems, process, and culture.

Changing words is easy.

Many companies call themselves now innovators. They have collaboration sessions, not meetings. They’re working under a new paradigm.

Real change is hard.

The truth is, most companies just change words. They still have meetings, they improve instead of innovating. Changing the words is the easy part. Deploying real change is hard.

And it should feel that way.

Images: Courtesy of artbyphil

By now, it’s gone. A temporary city that forms during the annual Burning Man event is fading back into the nothingness of a remote desert. Most inhabitants are back in their normal life, and within weeks, the entire city will have disappeared. It’s an interesting way for a city to exist – once a year, just for a few weeks. People will talk about their experiences for months (just follow the hashtag #burningman to get a sense of the enthusiasm) and start making plans for next year’s event.

This was my second time at Burning Man. It remains one of the most bizarre, creative, inspiring, breathtaking and weird events I ever attended. Whatever you heard about Burning Man: It’s true. And, it’s completely false. You have to experience it to really understand it. It’s like having a kid, running a marathon or writing a book: Everything you heard about it is true. And, completely false at the same time.

On my way back from Black Rock City, I reflected on the lessons marketers can learn from Burning Man:

1. The paralyzing fear of change is far more inhibiting than the actual experience of change:

I’ve been a runner for more than 15 years. The first 5 years, I never ran more than 6 miles per day. A marathon was completely out of my reach, even though I was intrigued by the idea. “How do they run 26 miles?”, I asked myself many times, envisioning images of pain and agony. I tried to run 10 miles, never able to do it. Started walking after 6-7 miles, my usual comfort zone. Until one day, I decided to run 15 miles that day. No particular reason, just the feeling that I was sick of not being able to break that 7-mile barrier. And, I didn’t want to just break it. I wanted to shatter it. And so I did. Just to finish a marathon 3 months later.

Many marketers feel the same way: They want to break with the old model of marketing but they feel stuck in their old ways, the outdated processes and the aging model of broadcast marketing. They wait for someone to have the courage to change. The truth is: Nobody gets courage and then changes everything. First you change everything and then get the courage.

2. Don’t give up too early

The first time you try anything new, your senses are under attack. You don’t even know if it’s good or bad. You just know it’s new. You don’t know yet how to put it into perspective and add it to your experiences. The first time is the basic foundation of the overall process. The best advice for the first time in everything: Hang in there. Do whatever you can, the best you can. The second time is different: You have now one experience to compare your second experience to. And your second experience might be good or bad. Better or worse. It helps you to avoid bad experiences and to top good experiences. The third time is where it gets interesting. That’s when you become part of the context, when you can apply some of your experience history to the current experience. The third time gives you enough time to analyze incoming data.

This is true for visiting new cities. New countries. Starting a new job. And it’s true for marketing.

The first two digital campaigns/social media initiatives won’t be featured in any award book. I worked hard, I tried my best, I just didn’t have the proper context to deliver the best work possible. With the third campaign/initiative, I felt more grounded, more experienced. When you experiment with new platforms, new ideas or a new brand that just decided to run their marketing with you, just know you’re not going to ace it with the first idea/initiative. The fear of failure is looming large but you need to beat it by accepting this normal process.

3.) Give people a sense of ownership

The creativity and passion people pour into Burning Man has nothing to do with monetary rewards. It has a lot to do with a sense of ownership of the event. Sure, the man will burn, there will be coffee and ice, basic structures. The rest of the event is up to each one of the attendees.

Advanced managers base their ethics on fairness, harmony and gratitude to inspire a sense of achievement to goes beyond profit. Modern employees expect more from companies than just a paycheck. The work place should provide an avenue for employees to build knowledge, skills and experience.

The same is true for marketing: It’s not enough to have an offer or a discount coupon anymore. Customers review and recommend brands with a sense of ownership never seen before. Brands need to identify the best way to engage these passionate stakeholders. The future doesn’t belong to broadcast. The future belongs to companies that share values with their customers, that build platforms where all stakeholders can co-create and collaborate, and give people a sense of ownership.

4. Passion has real value

You can feel real passion. Just watch an artist or a kid immersed in something they are passionate about. Objects are not important at Burning Man. We are in the age of transition: From the economy of objects to the economy of people. Just look around: Everyone is starving for meaning. We’re meaning-making machines. All of us experienced how quickly the focus on profits can turn into an economic disaster. Instead, people want to do meaningful stuff that matters.

The new marketing reality implies that brands need to take a hard look at themselves and decide what they stand for. What is the inner truth of your company? What is your purpose? The foundation of any successful company in the future is purpose, passion and integrity, coupled with empathy and care for all stakeholders. It goes way beyond any CSR initiatives or charitable donations. The new marketing reality requires companies with big hearts.

5. The world needs more kindness

Tim Ferriss (The 4-hour workweek) discovered kindness in a sand storm. And, he shared a poem by Naomi Shinab Nye, entitled “Kindness”:

Before you know what kindness really is
you must lose things,
feel the future dissolve in a moment
like salt in a weakened broth.
What you held in your hand,
what you counted and carefully saved,
all this must go so you know
how desolate the landscape can be
between the regions of kindness.
How you ride and ride
thinking the bus will never stop,
the passengers eating maize and chicken
will stare out the window forever.

Before you learn the tender gravity of kindness,
you must travel where the Indian in a white poncho
lies dead by the side of the road.
You must see how this could be you,
how he too was someone
who journeyed through the night with plans
and the simple breath that kept him alive.

Before you know kindness as the deepest thing inside,
you must know sorrow as the other deepest thing.
You must wake up with sorrow.
You must speak to it till your voice
catches the thread of all sorrows
and you see the size of the cloth.

Then it is only kindness that makes sense anymore,
only kindness that ties your shoes
and sends you out into the day to mail letters and
purchase bread,
only kindness that raises its head
from the crowd of the world to say
it is I you have been looking for,
and then goes with you every where
like a shadow or a friend.

When your dreams turn to dust, vacuum.

Enterprises change at a breathtaking pace, reorganizing too often. Wasting a lot of time, energy, money and morale in the process. in the middle of a market tornado, enterprises try to reach a “stable state”. We would argue, enterprises should strive to reach a dynamic state. A state where adaption doesn’t equal reorganization. Such an organizational design is already being utilized.

The Multidimensional (MD) Design

The Multidimensional Design was originally developed at Dow Corning. It eliminates the need to reorganize when faced with a significant internal or external change.

The need to organize comes from the need to divide labor. To organize is to divide labor among different individuals or groups and to coordinate their activities in such a ways as to obtain a desired output. The more divided the labor, the more coordination is required. There are only three ways of dividing labor, meaning only three types of organizational unit:

a)    Functionally defined units (Purchasing, R&D, Industrial Relations, etc.)

b)   Product- or service-oriented output units (the magazines of a publishing company, the coffee of Starbucks)

c)    Market- or user-defined units (units defined by the geographic areas they sell in)

Most enterprises have all three types of units. Their importance is often ordered in the structure of most organizations. If product uniqueness is most important, then product-defined units dominate. If costs are the primary concern, functionally defined units rise to the top. All reorganizations involve changing the relative importance of the three criteria used in dividing labor, that is, changing the organizational levels at which units of the three types appear.

If units of all three types are established at a particular level of an organization, as their relative importance changes all that is required at that level is a reallocation of resources among them. Their reorganization is not required. Therefore, if the three types of unit are established at every level of an organization, the need to reorganize at any time is completely eliminated. Units of any of the three types can be added or subtracted without requiring reorganization; the organization’s structure remains the same.

Conventional representations of organizational structures do not indicate the interactions of the units. Three-dimensional representation of an organization makes it possible to show explicitly the interactions that should or do take place between units.

Product- or Service-Define Output Units

In a multidimensional organization, product- and service-defined (output) units consists of a management and only a small supporting staff, but no other personnel, and no facilities other than what is required to house this small staff of people. They are responsible for providing or arranging for all the activities required to make their products and services available to customers. These units obtain income from sale of their products and services. If they require more capital than they generate or accumulate, they can apply for it from a higher level of the organization. They are expected to treat such funds as loans or investments. They must pay for their use, one way or another.

Function-Defined Input Units

Units whose outputs are consumed primarily by other internal units are functionally defined , or input units. Functional units are often divided into two types, one defined as “operations” and the other as “service”. Operation units are ones that have a direct effect on the output (operations) of the organization, for example, manufacturing, maintenance, and purchasing. Service units have no such effect; they affect the nonoperational behavior of other units; they affect the nonoperational behavior of other units. Functional units are free to both purchase whatever they need and to sell whatever they produce or provide, either internally or externally. Their purchasing and selling decisions are subject to intervention from above and to compensation for such intervention when appropriate. They receive the income that their sales generate, and they pay the cost of whatever they purchase.

Market- or User-Defined Units

Market units – units that are defined by the users by the users they serve – have two complementary functions. First, they sell the outputs of any other unit in the organization that wants to use their services, as well as selling outputs externally. Second, market units also serve as advocates of the users in the markets for which they are responsible. They should not only represent the company in the market, but also the market in the company.

Market units evaluate the activities and outputs of other internal units from the point of view of potential and actual users of the organization’s outputs, who are outside of the organization and are affected by these outputs. For that reason, market units operate as consultants to the executive office and other unit heads.

Performance measures

A uniform, explicit, and operationally unambiguous measure of performance – which incorporates some function of the amount of profit generated, for example, return on capital employed – can be applied to units at every level, including the executive office. This makes possible comparison of the performances of units at all levels and discourages make-work and bureaucracy. However, profit is by no means the only important performance characteristic. Recall that in socially-systematically conceived organization, development of the organization, its stakeholders, and its containing system are its overriding objectives. Although profit is necessary for corporate development, it is not sufficient.

In our next installation, we discuss a plan being a system of solutions.

Previous installations can be found here: Part 1, Part 2, Part 3, Part 4, Part 5, Part 6 and Part 7, Part 8, Part 9.

Image: Courtesty of 24.media.tumblr.com

“It turns out that an eerie type of chaos can lurk just behind a facade of order – and yet, deep inside the chaos lurks an even eerier type of order.” – Douglas Hofstadter

One of the fundamental characteristics of today’s enterprise environment is change. Today’s rate of change can often be experienced as chaos. All of us are grappling with the implications of technology, demographic changes and the impact of the human race on the planet. And we have an armada of experts that tell us how it will affect us physically, psychologically, socially, and organizationally. The fact and necessity of change needs to be a major consideration in the management of any enterprise. In addition, it is imperative for executives to be competent in introducing, responding to, or coping with fluctuations in the environment.

Before an enterprise can deal effectively with chaos and the always-present change, it needs to craft a situational analysis. It provides a comprehensive view of the system they manage. It also helps with determining its projected future, where it will be if it continues on the current path and be prepared for situation where the unexpected happens. These projections are imperative to understand how the enterprise will be affected unless it changes.

Situational Analysis Content

The situational analysis needs to contain at minimum:

• Flow of business transactions from initial order to final delivery
• Information flow required by underlying business transactions
• Flow of financial resources
• Culture of the enterprise. Differentiating between real culture and externally communicated culture (Policies)
• Conflicts within the enterprise and between the enterprise and other stakeholders
• External Trends and implications to the performance of the enterprise

This situational analyis is a much more in-depth look at the overall health of the enterprise compared to the typical SWOT analysis. In addition, we do recommend enterprises developing an ultimate apocalypse scenario.

Ultimate Apocalypse Scenario

The goal of the ultimate apocalypse scenario is to understand when and how the organizational system will break down if there are no adjustments. We all know that enterprises will eventually intervene and adjust. (Often too late or not early enough.) To be clear, this scenario is very unlikely to happen. But it helps enterprises to understand when and how the system will break down if no changes are implemented.

Fact is, the majority of organizations will not change their course unless they are in a state of crisis. Let’s just have a look at the current state of the U.S. government: For how many years have we heard we need to change fiscal direction? For how many years have we listened to politicians talking about the crisis of entitlements? Only after we stepped away from the brink of the financial abyss, we started to have an intelligent discussion about fiscal policy. Projections about our impending bankruptcy revealed the crisis of of our fiscal policy unless we change our behavior.

The ultimate apocalypse scenario should be communicated through a lively narrative. Humans react favorably to real stories, to vivid images. Just explaining the the federal deficit might reach 50% of GDP doesn’t evoke any emotions. A scenario where nobody will buy our debt and bond vigilantes will run the fiscal policy of the US evokes strong emotions.  The ultimate apocalypse scenario provides an enterprise with an opportunity to control and influence a significant part of its future. The goal of the enterprise is to influence the future and not be influenced by the interventions of others.

In Part 5, we will discuss Pie in the Sky planning.

And, in case you missed the first three parts, you can find them here: Part 1, Part 2 and Part 3.

Thinking back on it, my experience as a five-year-old is not much different than the experiences of many in today’s workplace when change is imminent.

Reality is: we get comfortable. We make friends, become competent at our jobs, create routines and stick to them. This comfort, however, breeds stagnancy when it comes to evolving as a human or as an organization. People become set in their ways, innovation falls by the wayside, and, for the most part, people drudge through their workweek,  dodging corporate bullets and looking forward to their upcoming vacation. And retirement.

Seth Godin begins LINCHPIN by proclaiming “You Are a Genius”.  This is a concept that gets lost when we become comfortable.  And, worse yet, most corporate systems are not set up to foster change toward embracing one’s genius.

What if it were different? What would happen if you embrace change when the opportunity arises instead of hiding or running away from it? We would love to hear your thoughts and join you in conversation around this topic.

• How can you harness change for the betterment of yourself?
• How can you embrace change to help transform your organization?
• What can you do to demand change in a toxic, un-evolving organization?