The traditional approach is no longer effective. In her new book, 11 Rules for Creating Value in the Social Era, Nilofer Merchant makes this assertion.
In the "old" days of traditional strategy, she says that companies didn't need to tap into their employees' skills and innovation to stay competitive.
Today, things are different. We can now utilize social media to engage our workforce's hearts and minds. Today, we can go social and blur the lines between our company, workers, and consumers.
Over the next ten minutes, join us as we go social with Nilofer and discover the new laws of value creation.
Lesson 1: Connectivity and Contribution
The Social Era is all about tying things, people, and ideas together. According to Merchant, today's power is derived from connectedness.
Links through collaborative platforms and cooperative enterprises and connections in the way we work with others.
The Social Era, according to Merchant, will reward businesses who recognize they can't generate value on their own.
Anyone may contribute and create. Merchant used the term onliness to describe an individual's contribution. Onliness is something that only a single person can offer to a situation.
Skills, interests, and a sense of purpose are all important factors to consider. We all have our own particular experiences, both good and terrible, and we should make the most of them.
We must accept and exploit our history, even the "bad side," to our benefit. We must also ensure that everyone has a stake in the outcome. Every single one of your workers should be aware of your plan and how they fit into it.
If they don't, you're making an Air Sandwich, as Merchant coined the phrase in her earlier book, The New How.
It refers to the disconnect between strategists and those entrusted with putting the strategy into action. If just 5% of your employees know your plan, the remaining 95% have no clue where they should be running.
Lesson 2: Adaptability
According to Merchant, consumers, who have historically been thought of as value extractors, are now regarded as a source of value creation and competitive advantage.
She argues that attempting new things and learning from failures strengthens connections, resulting in resilience.
In the Social Era, adaptability is also critical for companies and individuals to succeed. Rather than striving for perfection the first time, we must be incremental and constantly develop to provide the products or services our consumers want. Involvement of the consumer is also required.
Organizations that allow individuals to contribute produce far more value than those that strive to control every component.
Rather than placing the customer at the end of the value chain, more and more businesses are engaging customers as "co-creation" partners in their innovation efforts. She is the value equation, and sharing power enhances speed.
Lesson 3: Hierarchy-free
The Social Era's central concept is that organizations should be devoid of hierarchy.
Organizational structures, according to Merchant, should be viewed as concentric circles that shift and resize as needed.
We play to our abilities, and if our strengths aren't required, we pass the baton to someone else. If we require a talent we do not possess, we use our linked networks to locate it.
What's your perfect organization?
The best answer, according to Merchant, is flexibility in the workforce. This, says Merchant, leads to increased respect and recognition for workers while also sharing power with management.
Organizations will shift their focus from managing a job function to addressing each individual's unique contributions—their onliness.
Individuals will focus on "portfolio building" rather than "resumé building." Badges will be about the things we care about, not the organizations we belong to – our badges of talent, interests, and purpose.
Lesson 4: Love, Not War
When we examine traditional sales and marketing vocabulary, we may discover parallels with war, according to Merchant.
We take aim at the market we want to reach. We gain or maintain market share; we go for the competition. Customers come to us.
She proposes a more personal strategy for the Social Era, equating social era marketing to falling in love and following the stages of passion, struggle, commitment, and co-creation.
Social Era Marketing Stage 1: Romance
Introductions are the focus of the first phase. It's all about getting to know one another, both as a client and as a supplier.
It's all about noticing the tiny details about the other party that appeal to you. Things that make you happy and make you desire more. It's all about going on adventures.
Social Era Marketing Stage 2: Struggle
As we spend more time together and get to know one another, there is a shared effort to figure out how both people in the relationship will work together.
We learn about their tiny "bad behaviors," things that aren't quite what we expected. Both parties must share in the outcome at this point.
Social Era Marketing Stage 3: Commitment
When the relationship has reached a point of stability, both parties know what to anticipate from the other and are willing to be there for one other, for better or worse.
We can overlook little annoyances because the benefits of commitment outweigh the costs.
Social Era Marketing Stage 4: Co-creation
A consumer in this sort of connection isn't just making a transactional buy; they're also engaging in the process of creation. The vendor and the client make their own "child."
According to Merchant, marketing in the Social Era is difficult. Customers are hard to control and anticipate when they are at the center of all we do. But keep in mind that it is the process of making errors — and the forgiveness that follows — that gives partnerships their tenacity.
Lesson 5: New Strategies
The competition has altered, as Merchant points out. The value proposition has evolved. The nature of work has evolved. Many fixed expenditures have morphed into variable expenses.
In the value equation, marginal cost is more important. The barriers to admission have been lowered. As a threat factor, size is unreliable. Despite this, our business models have not evolved to keep up with the changes.
Aside from market-specific rivalry from below, disruptive firms developing new methods to get work done are also a threat. In the Social Era, the strategy must focus on the big picture and rely on consumer feedback loops to adapt and alter course.
Set a path, make adjustments as needed, and keep learning until you've nailed it. Connecting with our consumers can help us create resilience. It allows us to feel more connected to the community we're building.
The Social Era is a new era, which necessitates the development of new business models. We must acknowledge that we are playing a new game and recognize that the criteria we used to evaluate success no longer apply. Other criteria must be developed again.
Lesson 6: Unlocking Talent
The first step in unleashing talent has already been identified: acknowledging onliness and the unique contribution that everyone can offer. However, possessing onliness is insufficient in and of itself because onliness differs by nature.
We need to create a baseline of understanding, according to Merchant.
This common baseline begins to bring onliness together for a similar goal. It spreads the benefits of onliness from one to the next. It isn't about how clever, good, or experienced someone is to be successful.
Rather, it's about the results of what occurs when all of those great individuals collaborate in a similar community, co-creating with a common goal in mind.
Giving your brilliant employees the ability to make decisions is the final stage in unlocking their potential.
As previously said, organizational hierarchies are unfit for the social period because, without hierarchies, command, and control are absent. People will respond by making their own choices.
Granted, these choices must be made in the context of the overall goal, but self-managed means self-motivated and self-determined. People are kept out of the gaps between the boxes when we just focus on the boxes in a typical org chart. However, it is in these places that we may discover fresh talent and offer value.
Lesson 7: Social Purpose
Merchant proposes that in the Social Era, we require a sense of social purpose. It's no longer advantageous to regard consumers as lifeless things. We must interact with them and maintain our integrity. We all have activities we do and things we care about.
Then there's the narrative we tell about it. Individuals are said to have integrity when all of these factors are in perfect harmony.
In the Social Era, Merchant points to three ways in which social purpose matters:
Why should someone work for us if work is freed from jobs?
The reason for this is that we provide a community – a collection of like-minded, driven, and inspired people. Time slows down in these situations, work is enjoyable, and we all share a desire to make a difference.
Speed is defined as the shortening of time.
We can get to the endpoint faster because we operate in pools of untapped potential and have the flexibility to act. When individuals understand an organization's mission, they don't need to ask permission or questions before acting; they can just do it.
Whatever market you service and how you do business may be infused with meaning and purpose. Things take on new meaning when your company is run by people that understand and live the mission.
According to Merchant, Social Purpose provides our aims a "why." Everything is procedural without a social drive. Organizations rely on the what if they don't know why.
So, are conventional strategy businesses bound to fail? That's not the case. Like Darwin's Theory, the firm that adapts to environmental changes the quickest will succeed. And who doesn't want their company to grow?