Social enterprise: fact or fiction?

by admin on February 23, 2012

in Industry

‘Social’ is a topic that has entered the discourse both in management and IT talk. Perhaps the best example is Salesforce.com. It has popularised the notion that by socialising business you can do better as a business. Is that true?

Next week, I will be debating with Dion Hinchcliffe of Dachis on this topic. Here is the debate landing page from which you can click a button to add it to your calendar. I am taking the ‘against’ part of the debate. My opening remarks are as follows.

The notion of a social enterprise is at best laughable and at worst ridiculous. Enterprises are artificial constructs designed with one purpose – the creation of wealth for the benefit of shareholders. The fact that such enterprises may employ people doesn’t distract from the primary purpose. That’s why we have hierarchies, rules, command and control. They serve to constrain people into behaving rationally and only for the benefit of the enterprise. Some argue that the very fact enterprises require people makes them social. That is a logical fallacy. The notion of a social enterprise is merely the latest in a long line of fashion driven management constructs designed to make employees believe that the enterprise cares. Which of course it doesn’t. Instead it wants to suck more out of its employees. That’s anti-social and makes the whole notion of a social enterprise impossible to achieve.

The remarks will go live on the landing page Friday.

Regular readers who know me as an avid Twitter fan and relentless writer of weblogs might be surprised that I am taking this position. Those who have read some of the success stories that Dion outlines will likely say – but how can you possibly be against the idea?

While the idea sounds enticing, I sense that delivery is much harder than is imagined. There are some tough pre-requisites that have to be in place before any notion of the social enterprise makes sense. And let’s be brutally honest, how many enterprises or institutions can you think of that behave organisationally in such a way that they could be described as social? There is no question we have the tools to get the job gone but I have yet to be convinced that we’re even close to having the methods.

If you find this topic interesting then I’d encourage you to listen to the live debate. It has enormous implications for the future of work, how we will be organised in the future and how things will get done – or not.

As a side note, I am on the Constellation Research Group panel for their next Super Nova awards on the topic of ‘future of work.’

Comments on this entry are closed.

freebalance February 23, 2012 at 11:54 am

The tech industry seems to be doing a great job of misdirection. For one thing, ‘social enterprise’ ought to be understood as organizations focused on overcoming some social problem rather than traditional companies who happen to use social tools for internal and external engagement.

dahowlett February 23, 2012 at 2:43 pm

@freebalance That is precisely the point in the eyes of management. In fact there is a conference on that very topic that speaks directly to that thought. Confusing isn’t t when others see it as a handy moniker on which to flog the ‘next big thing.’

OneAccounting February 23, 2012 at 12:36 pm

I think there are organisation out there who have done a great job of integrating social platforms into multiple areas of their business. Dell has over 6000 trained in social media to communicate with customers on the company’s behalf. Using social media for customer service, recruitment, human resources, internal comms is actually a more natural fit for today’s workforce than more traditional mediums. I think companies like ZenDesk, Yammer, 37 Signals are much better at addressing the needs of the current market place than companies with little to no social focus like Microsoft. But I agree with your point that we’re lacking in methods.

- Jenni

dahowlett February 23, 2012 at 2:41 pm

@OneAccounting you are referencing technology companies where I would expect to see some early success. However, I know of spectacular failures as well. My argument is not whether it works or not but that the pre-conditions necessary to make it a long term reality do not exist (largely.) There are always exceptions and outliers and yes, I agree that outliers can signpost an alternative reality but – for example – how many John Lewis’s or Co-Operative banks so we see? Precious few.

dahowlett February 23, 2012 at 3:04 pm

@OneAccounting You reference Dell. When I look at technology or management impact I like to consider the effect it has on the bottom line. Check out this from my colleague Larry Dignan: “For Dell, the PC business—especially the consumer unit—isn’t so hot. Dell’s consumer revenue in the fourth quarter fell 2 percent to $3.2 billion with operating income of $39 million. Sure, Dell’s consumer business is profitable, but the profits pale next to other units.” – That is where Dell has focused its attention. So the question is – does it matter? RIght now the answer seems ‘no.’

MartijnLinssen February 23, 2012 at 10:52 pm

Fiction.
It’s the law of physics really.

Check your local corner store with 2-3 employees. Social? Naturally.
Your local supermarket? Much less so, but still “social enough”.
The big mega market or mall? Not social at all

Same for entrepreneurism, SMB and enterprises: if you want to scale, something has to give

Social Enterprise? Social will turn out to be a new way for the same elite to make it through the clueless layer into the sociopath ranks

jonhusband February 23, 2012 at 11:30 pm

The notion of a social enterprise is merely the latest in a long line of fashion driven management constructs designed to make employees believe that the enterprise cares. Which of course it doesn’t. Instead it wants to suck more out of its employees. That’s anti-social and makes the whole notion of a social enterprise impossible to achieve.

I think that this is correct. I think the main problem (opinion only) is the use and relatively rapid adoption of the term ‘social’.

I have little doubt that the interconnected environment is bringing massive change to the nature of work, and will continue to do so. But that, I think, is different than being ‘social’.

Wrong label for a widespread and important phenomenon, in my opinion.

SameerPatel February 23, 2012 at 11:46 pm

Watch out – Muhammad Yunus ( @yunus_centre) might pull a Kanye West on you both for hijacking his topic. :p

Kidding – Good luck to you both!

robgarciasj February 25, 2012 at 12:45 pm

Really looking forward to this debate.
MY POV: enterprises have always been social within the construct of their business goals.  Human relations happen in any context, be it family, community, or job.  What’s new is that social networking and collaboration technologies amplify the reach and extend of social within the enterprise.  So laughable? Yes, if you think it refers to people hanging out sharing what they had for coffee. 
 
You have a point, companies may not care about employees being “happy”, but they do care about the bottom line, and having a disgruntle employee does not help, does it? So either fire them, or engage them.  Social technology can help dramatically.  Social does not mean “power to the people”, but it does mean enabling the workforce to collaborate and take ownership ( … of their projects yammer, of their sales salesforce  , or their performance rypple , of their careers and development upmo).  So walk the line of power distribution, and walk it very carefully, or you’ll find yourself on the side of higher attrition, and in the middle of a talent war.

dahowlett February 25, 2012 at 1:13 pm

 @robgarciasj  yammer  salesforce  rypple  upmo  – How many incredibly bright and talented people have you seen who have either faded away or simply gone elsewhere? I can give you a body count in at least one company I know extremely well.

jonhusband February 25, 2012 at 3:14 pm

 @dahowlett  there’s often a pretty common reason for that .. I’ve seen it happen to scores of both friends and at client companies.  The best and the brightest leave promising careers after 3, 5, 10 yrs or as they move into their 40′s.  
 
Why ?  IMO often because of pretty rigid structures combined with ineffective managers / management that’s not going anywhere .. notwithstanding performance objectives and That’s why we have hierarchies, rules, command and control. They serve to constrain people into behaving rationally and only for the benefit of the enterprise..
 
Hierarchies, rules and “command-and-control” are OK with me IF they are made operational by intelligent people who are aware of the world around them, the full scope and reach of the market(s) in which they operate, and who can listen, adapt and lead effectively.
 
In today’s arguably “new” set of conditions, In many areas of knowledge work there are good reasons to look to the principles of self-directed and self-managfed team and group work .. again, IMO

jonhusband February 25, 2012 at 3:14 pm

 @dahowlett  there’s often a pretty common reason for that .. I’ve seen it happen to scores of both friends and at client companies.  The best and the brightest leave promising careers after 3, 5, 10 yrs or as they move into their 40′s.  
 
Why ?  IMO often because of pretty rigid structures combined with ineffective managers / management that’s not going anywhere .. notwithstanding performance objectives and That’s why we have hierarchies, rules, command and control. They serve to constrain people into behaving rationally and only for the benefit of the enterprise..
 
Hierarchies, rules and “command-and-control” are OK with me IF they are made operational by intelligent people who are aware of the world around them, the full scope and reach of the market(s) in which they operate, and who can listen, adapt and lead effectively.
 
In today’s arguably “new” set of conditions, In many areas of knowledge work there are good reasons to look to the principles of self-directed and self-managfed team and group work .. again, IMO

jonhusband February 25, 2012 at 3:15 pm

Sorry, please delete 2nd instance of my comment.

dahowlett February 25, 2012 at 5:28 pm

 @jonhusband Odd – for whatever reason, it didn’t appear or I cannot see it on my screen. Ho hum

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