Dion Hinchcliffe has a prescient view of the transformational power of new technologies in the enterprise, cloud, mobile and social being amongst the key ones. His recent post “Should companies drive their traffic to Facebook?” caught our attention because it articulates something we’ve said in many ways and gives us some new hints as to how to again position our perspective, which is aligned with his.

In short the answer is “No”. We strongly believe in Hinchcliffe’s conclusion: “it’s unwise for businesses to use Facebook naively when organizations can easily create their communities of their own and control the data.” But there’s more.

Facebook is an opportunity and a threat to commercial enterprises, and it’s a threat on at least two major fronts – directly, and indirectly. It’s an indirect threat because if it’s used in the absence of a social strategy then ultimately the self-inflicted damage may prove fatal. It’s a direct threat because it’s a powerhouse on every digital front that you can imagine, and it might eat your business alive. Neither of these threats are, as yet, widely understood. And that’s why we were excited, and we admit to being a little surprised,  to see that the CEO of the Commonwealth Bank is sharply focused on these two issues.   Commbank is Australia’s largest bank and one of the world’s most profitable and in the Top 100 brands of the world, so it has a lot to gain and a lot to lose.

Putting aside the direct threat for now, the really big issue is the role of social business strategy and the efficient and effective connection between communities of employees themselves and via communities of customers, future customers, past customers and other stakeholders.

A naive Facebook plan can jeopardize internal collaboration and shareholder value

We outline some of our reasoning in “Why the CEO thinking Facebook Fails the Enterprise and its Employees” – that thinking “Facebook” can lead to a naive use of Facebook, and an underestimation of the change program necessary to create successful internal communities.

Hinchcliffe makes a very instructive point, which is that the “move to social” is following the same pattern of simply replacing a non-digital medium with a digital one as happened with email and the web and even digital TV. That is, the new power of the digital media was crippled by a mindset of it being “just another channel”. How often have we heard that said in relation to social? And we wrote “Why social is not just another channel” to try to convey the limitations of that mindset and to move past it.

Understanding where Facebook fits is a matter of having an effective social business strategy. And this is not a matter just relevant for big consumer brands or Lady Gaga. Facebook is a web, cloud, social, community, ecommerce, games, apps, technology, and business phenomenon. Its potential role should not be ignored by any business. But the point is that to allow your business to become captive to Facebook’s strategy, roadmap and policies has substantial risks. Every business needs to have a social business strategy which allows it to capture its own relationship data across its ecosystem within the context that most of its customers spend most of their time in other people’s online networks.

And of course a social business strategy ties all this back in to how employees collaborate and utilize this relationship data to improve the competitive performance of the organisation. It’s this bit which drives internal community strategy, and through that how this in turn interacts with external communities and stakeholders. This is a use of social media but it is not social media per se and not a social media strategy – it’s a part of a social strategy with various social media and social technology components.

Disruptive Cloud Social Mobile BigDataIan Narev’s two Big Ideas – collaboration and social

You could say that the above are “big ideas” which are still taking root. But some senior executives – CEOs amongst them – really understand the power of this transformation. Telstra’s David Thodey is one, and another is Ian Narev, CEO of Commbank who was quoted in an interview in the Australian Financial Review (June 8, 2012):

he’s [Narev] stamping his authority on the two big ideas that dominate his thinking for the bank: collaboration and an external focus. Driving this strategy is the rapid uptake of digital and mobile technology and social platforms that are changing the way people interact and do business.

‘We see a big opportunity here and we see an enormous strategic challenge,” he says. “Because if we are not willing to adapt our business models to seize the opportunity and respond to the challenges of this technology, we will get left behind. The next chapter is to really drive the culture towards the customer and collaboration,” he says. “The big prize, above all, [is] realising what I would describe as the latent growth in that core franchise: retail and small-business banking.”

So, he says, this means absolute focus on the customer and encouraging staff to be very externally focused. “Because, increasingly, our competition is from different places. And externally focused [doesn’t refer to] just foreign banks. It means technology companies, telcos, Apple, Google… Regardless of the names, whether it be Google or Facebook, the principle is the same: they have very high technology capabilities, very strong brand appeal, low legacy challenges. I consider that to be a real challenge,” he says.

The latter is exactly the point we make about Facebook in our cameo piece pre the Facebook IPO “Facebook IPO – Would you buy? A view from the land downunder”, which highlights the direct challenge arising from the power of the platform.

In essence the rest of Ian Narev’s challenge pivots on social and having and deploying an effective social business strategy and enterprise social networking. A key is working out how leaders allow employees to succeed in social business, and another is in the early stages absolutely understanding the difference between social media and social business. And last but not least the selection of the right social platform is critical, which means not being distracted by tools e.g. Yammer, and the populism of “social media experts” as opposed to strategic thinking about social and the future of the enterprise and the core systems architecture necessary to support the business goals.

We said early in January this year that social business was a sleeping giant which would stir in 2012, and it looks like the giants are awakening! With their awakening comes the realisation that these are massive cultural and enterprise challenges that need to be closely integrated and aligned with business goals and objectives. Facebook is a Jupiter but you need your organisation to be the Sun! Let’s hope that the days of conference speakers naively stating that “our strategy was to use Facebookare over.

Which other organisations do you know that are coming to grips with the big issues of social business strategy?

Please comment below.



Related: Social Business – 3 Keys to Success by Rob Howard.