Along with the term Big Data, “Social Business” has become one of the terms du jour when it comes to how organizations work.

Several agencies and organizations have come up with their definitions of what a social business is.

As we begin to be able to measure the degree to which employees collaborate in helpful ways through social technology, we will be able to build improved reward mechanisms to drive the desired behaviours and break down long-standing cultural barriers. Nigel Fenwick, VP and Principal Analyst, Forrester.

An organization must promote a business culture of transparency and trust from senior leadership to those working in the field. It must work to encourage a culture of sharing as well, employees need to feel comfortable sharing their sentiment and collaborating across teams and departments. Sandy Carter, VP, IBM.

Stop focusing on the technology and move into how people work… [in] their day-to-day tasks. Luis Suarez, Social Computing Evangelist, IBM.

A social business is something altogether different as it embraces introspection and extrospection to reevaluate internal and external processes, systems, and opportunities to transform into a living, breathing entity that adapts to market conditions and opportunities. Brian Solis, Principal, Altimeter Group.

As you can see, there are several takes on what defines a social business, yet they all have a common theme – the people behind the business.

It’s these people that both agencies and organizations alike are recognizing the need to empower with decisions and deeper interactions within the business, and to be able to do the work they’re best at and be provided with the tools – more often than not, social tools – to help them do just that.

Make that happen, and you have a far better culture, internally and externally. Achieve that culture, achieve more success.

Except, that’s not really what a social business is all about – instead, that’s more about humanizing your business through social collaboration. And there’s a difference.

A True Social Business

Perhaps it shouldn’t be too surprising that so many seem willing to jump onto the social business definition as the one highlighted by the above examples. After all, social media has been a constant when it comes to definitions outside original scopes:

    • Return on anything (Relationship, Influence, Connection, Empathy, etc.) except what matters to the bottom line – Investment;

 

  • Explosion in marketing terms (Content, Influence, Social, Social Media, Empathy, Relationship, etc.). Even though they all have a singular goal – results through marketing.

These are just two areas where social has – forced or otherwise – changed the language while not really changing the methodology or meaning behind the new terms. Social business is a little different, though.

A true social business isn’t about using collaboration, social tools and technology to improve the culture of an organization. Instead, a true social business can be defined as such:

[A business] created and designed to address a social problem (with social being societal).

[A business that is] a non-loss, non-dividend company (either financially self-sustainable, or profits are reinvested in the business, or used to start another one, with the aim of increasing social impact).

The above descriptions of what a social business looks like come from Nobel Peace Prize laureate, Professor Muhammed Yunus.

Muhammed Yunus

Given that the actual term “social business” was defined perfectly in his books Creating a World Without Poverty – Social Business and the Future of Capitalism (PublicAffairs, 2009) and Building Social Business – The New Kind of Capitalism That Serves Humanity’s Most Pressing Needs (PublicAffairs, 2011), I think it’s fair to say these definitions are the ones that truly identify what a social business is, and does.

Adding to this perception of social business are respected business professionals across various sectors.

That’s how I define it – not the social media one. Doing social good while making a profit. It’s why I love Beloved Beadwork in South Africa; they are a true social business and I love their energy and drive to make the world a better place. Anne Marie van den Hurk, Principal, Mind the Gap PR.

Unfortunately, web marketers got hold of the term and confused the meaning. Jon Aston, Consultant and Social Change Agent.

So if the definition of social business is that of a business looking to make a social impact, and better the world around them, where does that leave today’s term and its buzz?

Humanizing Your Business to Be More Social

Perhaps agencies and organizations need to look just a little more closely at their definition of a social business. By doing so, they’ll realize that what they’re actually referring to is two separate yet complementary terms – humanizing and socializing.

In their excellent book Humanize – How People-Centric Organizations Succeed in a Social World (Que, 2011), authors Maddie Grant and Jamie Notter share their years of combined experience in changing organizational culture to be more about its people.

In detailed analysis, Grant and Notter highlight why organizations struggle in today’s socially-savvy world, and where they need to improve. From the book:

We like being human. We like having the capacity to publish our own thoughts and to create things and share them with the people in our communities who actually matter to us. One of the reasons social media has grown so fast is that it taps into what we, as humans, naturally love and need and want to do – create, share, connect, relate.

Our organizations, however, are not as enthusiastic. We see the potential that social media has for our organizations, because of the energy and attention social media attracts, but we are having a hard time trying to fit these new practices into our existing systems. The challenge is to make our organizations more human.

Grant and Notter go on to break down what this challenge looks like, and how to overcome it.

By diving into all facets of the organization – Human Resources, management, hierarchy, silos, behavioural management, and decentralizing closed cultures for open ones – Humanize becomes the essential roadmap to change culture through collaboration and social tools. Sound familiar?

Yep, it’s exactly what today’s “social business” definition looks like. The closest organizational comparison to the social business meaning as defined by Yunus is “social enterprise”.

[A term used to describe] commercial activity by socially-minded organizations. - Wikipedia.

For example, a social enterprise may run employment schemes and opportunities to help those that would normally come up against barriers to that work. Additionally, by supporting the local community or sponsoring aid programs either at home or abroad, organizations can write off certain income and reinvest.

Having said that, even a true social enterprise goes beyond these two examples.

[A social enterprise] applies commercial strategies to maximize improvements in human and environmental well-being, rather than maximizing profits for external shareholders. Social enterprises can be structured as a for-profit or non-profit, and may take the form of a co-operative, mutual organization, a disregarded entity, a social business, or a charity organization. – Wikipedia.

Which closes the loop and circles back to Muhammed Yunus’s definition of a social business.

The Future of Business is Social. Or Humanizing. Or Both

That’s not to say that businesses need to reconsider calling what they do today “social business”. After all, they may have a philanthropic involvement with either the local community or a need further afield.

Perhaps they allow employees time off for community projects, or they allocate their Christmas Party money to the local food bank. At its heart, these are the actions of a true social business.

But let’s not confuse how organizations are creating culture changes (humanizing their business) with real societal impact (social business) by and for business owners, employees and stakeholders.

The world of social media consultants and agencies already have enough adoptions of differing terminologies – it’d be nice to keep one that really matters true to itself.

image: James Dellow

13 comments
Ivan Widjaya
Ivan Widjaya

I have worked for a company whose owner wants to be hidden from the public. His priority is not the customer and he thinks more about money. He keeps some areas of his business hidden and he is definitely not present to manage his people. I can predict that everything will go downhill eventually. It is only a matter of time.

Mila
Mila

Excellent post and overview of the history of this term that seems to be taking on new form in the current environment. Given the previous definitions, prior to the onset of organizations trying to work social networking into their corporate strategy, I would have initially agreed on the social business term - however more important than the formal meaning would be the public's general understanding of the term. If we attempt to communicate with others based on the true definition of a word, and the general public does not understand it to be such, there is much room for misunderstanding. I would be willing to wager that if we enter a circle of friends who have CSR knowledge. By CSR, I mean corporate social responsibility, then using the term social business would mean one thing only to them - the definition you presented above. However, switch to another circle of friends who know nothing of CSR (or very little) and they will relate to the term social business differently. So although I agree with the quest to define the terms properly, it is at this point ,perhaps too late.. I have used the term social business to describe what I do, although I wish that meant my business was one that existed purely to give back - I find the term makes sense to executives in the context of marketing, social HR, culture building and leadership. Yes, we've taken a term used for another meaning and now turned it into something completely different, but is that so bad? I think it is important to know the various meanings, but if the term speaks to those we wish to reach and becomes accepted in society as a commonly understood term for all of the above, then isn't that how definitions are born? Semantics... I really enjoyed your article, I think it spotlights exactly how fresh this field is - a field that struggles to identify itself with a term that would cover how deeply it can impact an organization on so many levels. The word social has various levels of meaning - it will be very interesting to see how these areas of "study" end up being called in the years to come!

Padraic Gilligan
Padraic Gilligan

Danny - brilliant post. I'm just wondering whether there's a step further in defining social businesses as businesses that regard profitability as more than the exclusive entitlement of shareholders alone? Global businesses today seem to pivot entirely around shareholder value and return, rewarding C suite executives with salaries that might embarrass basketball players and then justifying it all by spurious CSR initiatives that are really only window dresssing.

Ric
Ric

I find this to be sooo very appropriate these days and can point at the co I work for as the supreme example of the things not to do when engaging those you employ! My perspective is as a former manager and division builder and am regularly floored at the lack of social not only outward facing but the building of a welcome inward facing environment to support excellence by all involved! It can make or break!

Ming the Merciless
Ming the Merciless

I took idiots like Michael Brito and Brian Solis to task last year. This jargon crap drives us Intergalactic Overlords gamma ray crazy. Their view is to make employees already underpaid working in jobs they care less about to engage on social with customers and champion the social presence of their employers. Uhm yeah at $8 an hour with no benefits sure. In fact I will tell our customers what a crappy place it is to work in. While I bashed that view and brought up business has always been social dating back to the first time people bartered with each other, you are correct the proper view of a social business is the community driven one for good. In fact that is what Wall Street and the Trade Pubs have called it for a long time now. As for tools efficiency is key and traceability. You can not conduct customer service on Twitter or Facebook for anything a trail needs to be established. So while I might encourage a team to communicate with customers or vendors via social much business can not be conducted there. If you ever can have a 'he said she said' moment that puts $$ at risk it has to be via email.

Hunter
Hunter

I agree, and I believe that social media is going to be just as important internally as it is externally as well. Social is in almost every aspect of our life so it makes sense to incorporate it into the work environment as well.

Susan
Susan

This is good information.

Anthony Selvaggi
Anthony Selvaggi

Indeed... a great post. You hit it straight on but I also believe social media should be applied internally. Social Media is not just for our clients... it should also foster an upbeat, positive and enthusiastic internal environment as well. Organizations are only as good as the people behind them.

David Boozer
David Boozer

A HUGE YES! This was a great post Danny... I am trying to figure out something to add to it..and can't! I can only agree...

Danny Brown
Danny Brown

Hey there Mila, Perhaps an easier way for consultants and businesses to define what they do is "socializing business", which ties into the humanize angle but retains the social elements. Every I think of how social is attached to responsibility is the way defined by Professor Yunus: - Social business - Social responsibility - Social accountability - Social citizens That all ties to corporate responsibility and creative capitalism (as spoken of by Bill Gates at his "retirement speech"). Sadly, much like most of social media's attachment to such things, marketers do like to take something that means a completely different thing and twist it into their own definition, to make it sound brand new and charge more for their services. Hey ho. :)

Danny Brown
Danny Brown

Exactly, Padraic - the immediate example that springs to mind that relates to your point is Yang Yuanqing, the Lenovo CEO, and how he rewards those that really made his business a success - the employees: http://www.washingtonpost.com/blogs/on-leadership/wp/2013/09/05/lenovo-ceo-hands-over-his-bonus-to-hourly-workers-again/ That's a big step in the right direction, by investing in those people to help them achieve their goals. Combine that with the philanthropic angle, and helping the community around you... now we're talking. "Padraic" - that sounds like a fine Irish name, sir!

Danny Brown
Danny Brown

Hi mate, The one example that always comes to mind when I hear the term "social business" is Microsoft. What Bill Gates has done - either through his foundation, or the Creative Capitalism he champions - is inspiring. http://harvardmagazine.com/2008/10/bill-gates-on-creative-capitalism These are the guys that should be used as examples, and emulated - not some business that has empowered their employees to be more productive through social channels and an imagined collaborative environment. And I have to disagree on Twitter not being a great platform for measurable customer service - but that's a topic for another time. ;-)

Danny Brown
Danny Brown

Completely agree, mate - from something as simple as a Yammer for internal comms, to a full on social Intranet-led community, empower people to communicate faster and easier and you make the business slicker and more nimble. Which is never a bad thing.

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