So if we expand the operations layer, here is what it looks like (to me).

• Develop Offering - The creation of your actual product or service. This is inclusive of R&D and Production.
• Educate - With your offering in hand, you have to figure out how to tell potential customers what it is, in a way that they will want to consider “paying” for it.
• Create Decision Space - This is the time after you have the potential customer’s attention and before they have decided to plunk down their hard earned coin. It is also the mechanism by which you can assist them effectively gather the information they need to make their decision.
• Transaction - The (now) customer puts down the cash and you provide the value (hopefully).
• Maintain Connection - Once you have engaged the customer, how do you keep their attention?

So what is with all of this modeling?

I want to use these models to more effectively show how, and where, Relationship Technology can best be used to improve business outcomes. This is my attempt to overcome the problem I see in most pitches for using “social media” for business, there is no solid business framework upon which claims of value are made; just bold claims that “social media is good marketing” or “enterprise 2.0 will improve collaboration” without any context or explaination of the why or how.

I want to use these models to overcome that problem.

• Social Media
• Enterprise 2.0
• Web 2.0
• Social Networks
• Blogs
• etc.

None of these work well as an umbrella term. In light of that, I am going to start using

Relationship Technology

as my general term. You may like it or not, I don’t care. It works for me. So there!

I have often pondered the basics of business and, as I wrote in a previous post about Peter Drucker’s writings, many organizations have not addressed, nor do they understand, their own business basics. The other day I was thinking out loud in my trusty Moleskine notebook and came up with this:

The top two level are straight from Drucker. The top level of the diagram Ongoing Operations means that the ultimate purpose of the enterprise is be able to meet customers’ needs in the future, i.e. the company needs to be sustainable. The second level Reasonable Profit, means that organizations do not exist to maximize profit, but rather to make the right profit to ensure the company’s existence in the future. Often profit maximization in the short-term actually hurts an organization’s long-term prospects.

So with an understanding of the top of the pyramid, let’s jump to the bottom and work our way back up. At the base are the fundamentals. There are three things that must be present if any organization hopes to survive.

• Business Plan - What is the underlying concept of the organization, what is its product/service and how it is delivered?
• Qualified Employees - Does the organization poses the requisite skills to deliver the business plan?
• Efficient Operations - Can you execute the plan within budget?

Though a solid foundation layer is a necessary condition to achieve the ultimate objective of Ongoing Operations, it is not, in and of itself, a sufficient condition. So we go to the next layer, Engaged Employees. Just because you have employees that are capable of doing the job well, does not necessarily mean that they will perform well. They need to be willing to exert their discretionary effort to achieve excellent results and discretionary effort comes from engaged and passionate employees, ones that believe in the organization and what it is trying to accomplish.

When you have Engaged Employees on top of a solid foundation you get Effective Operations. That means better R&D, better Production, better Sales & Marketing, all leading to better products and services. When you do it right you create Engaged Customers, people that want to interact with you. If you listen to your customers and they are listening to you, you have the opportunity to create and deliver value for your customers, and ultimately the customer’s perception of value is what it is all about. If they receive value, and you have done everything else right, you get to receive a Reasonable Profit and live to create value again through Ongoing Operations.

Whew!

OK, assuming you buy into the model…so what?

In future posts I plan on using this model to show how social media and connected enterprise initiatives can be effectively integrated into a business, and why you would want to.

54 years ago Drucker published The Practice of Management. It is without a doubt the most important business book ever written. It is sad how few people in business have actually read it. One passage that I find particularly compelling, highlights how far most organizations are, even today, from understanding what he was talking about over half a century ago.

It is the customer who determines what a business is. For it is the customer, and he alone, who through willing [sic] to pay for a good or for a service, converts economic resources into wealth, things into goods. What the business thinks it produces is not of first importance — especially not to the future of the business and to its success. What a customer thinks he is buying, what he considers “value” is decisive — it determines what a business is, what it produces and whether it will prosper.

The customer is the foundation of a business and keeps it in existence. He alone gives employment. And it is to supply the consumer that society entrusts wealth-producing resources to the business enterprise.

If more companies had heeded this advice, I think the adversarial relationship most people experience with their service providers would not exist today.

So can we turn the tide and look at customers more like partners? I think Drucker would have applauded using the new tools available today to build better relationships between providers of goods and services and their customers. But what exactly will that look like? … Stay tuned.

When blogs first came on the scene, I don’t think anyone was able to foresee the resulting “conversation” we all now take for granted. What the first bloggers saw was, an easy way to publish, the overcoming of previously high technical barriers. The resulting conversation was emergent, not intended. If you really look at it, I think you will find that the same is true for most of the social media formats, each was initially conceived as technical solution to a previously difficult problem.

OK … so what?

If we think of the “social tool-set” in strictly social terms, we can become blinded to the value these tools can bring to other areas of information management. I refer back again to what Tim O’Reily said at Web 2.0 Expo in NYC last September, “Enterprise 2.0 is about exposing the back office.” When you think about the implication of what he was saying, there is a lot there that has nothing to do with social behavior, per se. Exposing the back office means,

• having direct access to your account information with your cell carrier;
• being able to directly schedule your own appointments to get your car serviced;
• not having to wait 30 minutes on hold to get tech support.

These are all examples of what will be the next generation enterprise applications, built on a set of tools that are inherently simple, scalable and flexible. These applications will look a lot like blogs, wikis, RSS readers, etc, but they will not necessarily be social.

The point being, that social media came into being because for the first time a set of tools existed that was able to be easily used by a broad number of people and was able to adapt fast enough to mirror real social interaction, not because the tools were inherently social.

So let’s take off the social blinders and look at the these tools as a new and better way to move information simply and easily from where it is, to where it needs to be, regardless of whether that information is social or not.

Look at any of the SNs out there today, there is a huge amount of effort spent on the development of your profile: creating it, protecting it, generating new content to make it fatter, etc. While there is very little attention paid to the development of relationships. Oh yeah…there are lots of tools for creating new connections, but once connected, there is little ability to create a rich relationship.

I am wondering if a better model might be to center the network around the relationship instead of the individual. Think of it this way, between any two entities, there is, in reality, a large amount of shared content in many formats: email, IM, tweets, phone calls, collaborative documents. Imagine if that content was aggregated in such a way that it was equally owned and shared by both ends of the relationship. Now that would be valuable.

I can see where each entity of the relationship could manage their own use of the relationship aggregate through filters and feeds, but they would still retain equal ownership of the shared content.

This approach would have great applicability for personal/individual relationships, but the real value comes into play with B2B and B2C relationships. Imagine, for example, if you and your mobile carrier shared all of the content about the relationship, in a common accessible location…billing records, support records, email transactions, support chats, etc.

Yes, I realize there MAY be some SLIGHT ownership and control issues from the perspective of those that currently “own” the data, but I think that in time, as the inherent value in this approach comes to be appreciated, that will change.

These are just some initial thoughts. If you think there is something to this, please jump in and join the conversation. I would especially be interested in hearing what Doc Searles and the VRM gang think.

Now I want to look at “inside-out”. The idea for this post was spawned by the Tim O’Reilly keynote at Web 2.0 Expo NY in September. He said that

Enterprise 2.0 is about exposing the back office.

At first, I didn’t think too much about the statement, just filed it away. Two days later, I was taking my wife’s minivan to the dealer for some maintenance. As I was driving there, I thought, wouldn’t it be cool if I could have access to the entire history of this particular vehicle. Not just maintenance records, but manufacturing records, bill of materials, problem reports, etc., i.e. everything that Honda has stored in their back office that is relevant to this particular vehicle.

(cue bright light bulb over head)

So that is what O’Reilly was talking about. Now it makes sense. E2.0 is not just a social thing, it is about providing the best possible information to the decision maker just-in-time. The social aspect of E2.0 is important because gathering information from the network is a great and highly effective way to become informed; but it is not the end-all and be-all of information gathering.

Lots of spin-off topics come to mind here:

• Customer as Partner
• Online (and vastly better) version of current teleprompt systems for customer service
• Integrating social and structured enterprise data
• Why E2.0 is more than just social stuff
• Motives behind social behavior
• …

…and I plan to address these in upcoming posts.

The central concept here is the more access to information we have AND the better we can filter it to meet our needs, the better off we all will be.

The glaring weakness in most cases for Enterprise 2.0 is the inability to tie the use of social web initiatives inside the organization to tangible bottom line results. The most common advantages cited include

• improved collaboration
• increased transparency
• increased information sharing and awareness
• personal productivity savings

The problem is that most people, in most organizations, find it difficult to connect the dots between these advantages and organizational efficiency, effectiveness and productivity. One answer to this problem may be Employee Engagement.

There is a lot of well founded research about how an engaged workforce leads to improved financial performance of the organization, for example this Watson Wyatt report. I believe that it is very easy to draw the link between the advantages of enterprise 2.0 and employee engagement. This link gives us, the members of the choir, a much more visible connection to organizational performance … and the basis for a much more viable case.

If we start drawing the connection between the social web and employee engagement, I think more people will start singing along with us.

Their key findings include:

• Companies with the most effective employee communication programs provided a 91 percent total return to shareholders (TRS) from 2002 to 2006, compared with 62 percent for firms that communicated least effectively.
• Firms that communicate effectively are four times as likely to report high levels of employee engagement as firms that communicate less effectively.

What this tells me is that effort spent to improve employee engagement, is time and money well spent. Music to my ears, since I believe that enterprise 2.0 initiatives can be a significant tool for improving employee engagement in organizations.

I found this report from a post by Daryl Cook, and I agree with his commentary, specifically his point that he believes, “that Enterprise 2.0 is more about creating a culture of participation and collaboration.”

We need to stop approaching E2.0 as a technology concept, and start looking at it as a business concept, because, as the Watson Wyatt report shows, there is real value in business process and behavior change.

Jim Haudan wrote a great post yesterday over at My Global career, called Engage Workers by Letting Them Think. He starts off by says:

…many employee engagement approaches are still one-way communication efforts on steroids that fail to tap into the ability of employees to think and act differently.  At a time when study after study confirms that only about 20% of employees are engaged in their current work, it’s hard not to conclude that something’s not working!

I think that E2.0 community should look more at the HR and Strategy community to get a better understanding of how this great new tool set we have can really impact business operations. Employee Engagement will be one of the three big levers for making the business case for E2.0 implementations.

If we continue listening to what Jim says, I think we will hear a lot of parallels to what we are trying to accomplish with wikis, blogs, social networks, etc.

You can’t possibly be engaged if someone else is trying to draw your conclusions for you.  You need the “emotional aha.”  You need to feel like you’re totally in the game by really feeling what the business needs, figuring out how you can help, and realizing why you make a difference.

This type of personal, emotional connection is why we all believe that creating the connected enterprise is so worthwhile. This connection and freedom to act brings engagement, passion and ultimately innovation, effectiveness and productivity.