Why Business Fails at Social Stuff: Part 3

by Jay Deragon on 07/29/2008

Businesses Fear the Social WebWe were recently meeting with one of the top executives of a Fortune 500 company and discussing the power and dynamics of social networks.

The issue being discussed was whether creating a “social network for customer feedback” was a good or bad thing for the organization. One of the executives commented “I’d hate to empower our customers to complain because there is a lot of things we do wrong that they could complain about and opening that dialog up to the public could be dangerous, risky to say the least”.

Hmm….so ignoring the issues and hoping customers don’t talk to other customers is a better strategy? Do you think maybe your customers could actually help you solve the very problems that create the complains? Do you think your employees agree with your customers but don’t dare speak up?

Business bureaucracy has brainwashed many people into thinking “nothing can change so hide the truth”, don’t put things out in the open because it is dangerous to admit shortcomings publicly. The social web is dangerous to the bureaucracy of business because it enables customers and employees to “openly discuss and share the very issues that ingrained bureaucracy has caused.”

Jack Welch, The legendary leader who transformed GE writes in his column in Business Week: Death to Bureaucracy

“That may sound harsh, but hidebound behavior is a business-killer: Damages? How about deadens? That’s a better word to describe what bureaucracy does; it sucks the life out of a business. It turns normal people, granted a smidgen of authority, into rule-bound technocrats and twists candid conversation about real issues into jargon-laden gobbledygook. In short, bureaucracy gums up the works. It’s a competitiveness killer.”

“And yet for all its destructive power, and in spite of all the people who claim to abhor it, bureaucracy almost never gets the kind of fight-back it deserves. Most people simply suffer through it.

“So why do people put up with it? Probably because bureaucracy just seems like too big a monster for any one individual to slay. And we’d agree, unless that individual happens to be the leader. After all, it is leaders who set the tone for their organizations through the values they choose and the behaviors they demonstrate. And ultimately, it is leaders, and leaders alone, who have the power to set a bureaucracy eradication process in motion.”

What most business leaders don’t understand today is that the social web is a medium for open, honest and frank conversations between people, one to one to millions. Nothing can be hidden and the more people that become engaged the greater the reach of the conversations.

The old publication “Consumer Reports” will be replaced with “Consumers Discuss” and those conversations are open and available for the world to see and for businesses to learn from. This is a scary reality for many business leaders who are threaten by all this open and frank conversation about everything and anything. Worse, the ability of “customers” to connect with other customers and employees to connect with other employees is yet another scary thought for any bureaucracy.

Jack Welch says “If you’re a business leader, you can’t surrender to the status quo, either. True, you will never be able to eliminate every vestige of deadening bureaucracy. But try like crazy anyway. The upside is huge. All it takes is courage.”

The social web threatens those who are painfully familiar with the legions of businesspeople who’ve run headlong into the stultifying effects of corporate officialdom. The shift occurring is that people are discovering the power of the social web and its attraction to people who simply want to speak up and be heard. Now the question for all businesses is “are you listening and subsequently what will you do to respond?”

The challenge is to let go and let the people engage and solve your problems. It is called empowerment and people have been seeking it for generations. A very wise man once said ” a wise man seeks the counsel of many“. Lets see how many wise business leaders will be in adopting the principals of the social web. As Jack Welch said “The upside is huge. All it takes is courage.”

What say you?


Voligaill July 16, 2011 at 5:40 am

moral gonna verbalize hello…

AssangeLiveNep January 6, 2011 at 9:48 am

So….. where is toilet? Hehe))) Joke, relax 😉
Thank for all
bye bye ;))

Ed Dodds December 28, 2007 at 4:05 pm

Jay, what businesses truly fear ( and by businesses I mean the non-outsourceable management strata ) is that social web collaboration will accomplish that which the dying unions have been unable — put a magnifying glass on the practice of struturally redefining employees as contractors ( permalancers to use the “in” term du jour ) in order to avoid paying benefits. The not very publicized case of Viacom ( http://gawker.com/news/viacom/ ) is case in point. What businesses have failed to realize is that if they remove that one benefit for which most people strive ( health insurance for family members ) there is truly very little loss in walking out on a substandard business culture — see: Bob Sutton and the “No AH Rule” ( http://bobsutton.typepad.com/my_weblog/ ) and the ROWE concept ( http://www.culturerx.com ). What we need are bosses who aren’t afraid of employpreneurs and some venture money to back them.

Eric Weaver December 23, 2007 at 2:44 pm

Great point! The only problem is that people settle into least painful scenarios often change only when absolutely necessary. Combating the natural corporate risk aversion that happens during questionable economic times is always challenging, because you’re working against the inertia of the status quo, the safety of known behaviors. When instigating change at work impacts others and triggers THEIR’ risk warnings, the culture then clamps down and the hopeful change agent is often pulled back down to “safety” by their peers…resulting in us looking at smart folks like Mr. Welch and thinking, “wouldn’t it be nice, if only I could.”

As a veteran instigator with the plethora of short-stint jobs to prove it, I can safely say that change and risk are far easier to implement when the folks at the top are equally fearless and empowered. When that happens, it’s a beautiful thing. Lucky are the folks who find themselves among such people.

Like the telephone, the fax machine, the computer and email, the social web is here to stay. The smart ones will embrace it to their competitive advantage. The more conservative will eventually find themselves begrudgingly catching up, as always.

Go instigators!

Michael Pokocky December 22, 2007 at 9:12 pm

Business fear nothing because they are business by being fearless in the first place.

I think to paraphrase Seth Godin that “being remarkable” is the new mind set, not only for business but for the emergence of the individual in the Relationship Economy.

It will be interesting to have some data on this, say in two years, to look back at businesses that survived and businesses that didn’t and why?

Carter Smith December 21, 2007 at 2:02 pm

You are so right: the social web is a medium for open, honest and frank conversations between people, one to one to millions. Nothing can be hidden and the more people that become engaged the greater the reach of the conversations.

While “Keep everything close-hold. . . Make it so contact with the company from outside is a privilege that is earned, not a natural response to an attempt to get information by a potential customer” has been the norm. That’s so old-school!


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