The social matrix and ten IT-enabled business trends

Blue pill, red pill? What is the social matrix?

An article in the McKinsey Quarterly by Jacques Bughin, Michael Chui, and James Manyika, Ten IT-enabled business trends for the decade ahead, describes ten key digital information trends looming large on management agendas.

These ten trends are listed below but the most relevant is the first: joining the social matrix. The social matrix is not just relevant to big business. Anyone with a stake in an organisation needs to be aware of how these trends are going to affect how they conduct business.

The social matrix is much more than social media: it connects many organisations internally, and increasingly externally, to reach audiences, like suppliers and customers. The social matrix also extends beyond the co-creation of products and organisational networks. It is now the environment in which more and more business is conducted.

Many organisations rely on networked problem-solving, using the thinking power of a number of people inside and outside the company for new ideas and solutions. The pharmaceutical giant Boehringer Ingelheim, for instance, sponsored a competition on Kaggle (a platform for data-analysis contests) to predict the likelihood that a new drug molecule would cause genetic mutations. The winning team, from among nearly 9,000 competitors, combined experience in insurance, physics and neuroscience and its analysis beat existing predictive methods by more than 25 percent.

Blue pill, red pill

This is your last chance…after this, there is no turning back. You take the blue pill, the story ends, you wake up in your bed and believe whatever you want to believe…

Searching for information, reading and responding to e-mails and collaborating with colleagues can take up about 60 percent of knowledge workers’ time: they could become up to 25 percent more productive through the use of social technologies. IT-services supplier Atos has pledged to become a zero e-mail company by 2014, aiming to boost employee productivity by replacing e-mail with a social networking platform.

Companies also are becoming more open, ready to communicate across traditional functions and assemble teams with the specific knowledge required for a project. Kraft Foods, for example, has invested in a more powerful social technology platform that supports microblogging, content tagging and the creation and maintenance of specialised communities. Benefits include accelerated knowledge-sharing, shorter product-development cycles and faster competitive response times.

Enterprises still have plenty of room to improve: only ten percent of the executives surveyed last year said their organisations were realising substantial value from the use of social technologies to connect all stakeholders: customers, employees, and business partners.

Social features, meanwhile, can become part of any digital communication or transaction — embedded in products, markets and business systems. Business users can like things and may soon be able to register what they want, enabling new means of registering preferences and, as a by-product, inceasing motivation.

Department-store chain Macy’s has used Facebook Likes to decide on colors for upcoming apparel lines, while Wal-Mart Stores chooses its weekly toy specials through input from user panels powered by social media. In broadcasting, RTL Group is using social media to create viewer feedback loops for popular shows such as X Factor: a steady stream of reactions from fans allows RTL to fine-tune episodes.

The ten trends from the research and article are:

1.  Joining the social matrix.

2.  Competing with ‘big data’ and advanced analytics: three years ago, McKinsey described new opportunities to experiment with and segment consumer markets using big data. As with the social matrix, the firm now sees data and analytics as part of a new foundation for competitiveness.

3.  Deploying the Internet-of-All-Things: tiny sensors and actuators, proliferating at astounding rates, are expected to explode in number over the next decade.

4.  Offering anything as a service: the buying and selling of services derived from physical products is a business-model shift that’s gaining steam: a prominent example of this shift is the embrace of cloud-based IT services.

5.  Automating knowledge work.

6.  Engaging the next 3 billion digital citizens.

7.  Charting experiences where digital meets physical: real-life activities, from shopping to factory work, become rich with digital information and as the mobile internet and advances in natural user interfaces give the physical world digital characteristics.

8.  ‘Freeing’ your business model through Internet-inspired personalisation and simplification: customers expect services to be free, personalised and easy to use without instructions.

9.  Buying and selling as digital commerce leaps ahead: reducing barriers to entry across a wide swath of economic activity.

10. Transforming government, healthcare, and education: technology-enabled productivity growth could help reduce the cost burden while improving the quality of services and outcomes, as well as boosting long-term global-growth prospects.

Six types of social media user

At this point, no single customer engagement channel can deliver marketers a complete picture of consumer behaviour.

Google knows what you’re interested in, but not what you’ve done. Facebook knows who your friends are, but not what you buy. Pinterest knows what you share, but not how you act on it. Foursquare knows where you are, but not what you like. You get the idea.

Social media measurement is critical to success, but brands have been unable to get their arms around what it is and what it means.

Aimia, a loyalty management firm, has unveiled a new segmentation model that analyses trust and control as drivers of six distinct social media personas. The model is detailed in a white paper: Staring at the Sun: Identifying, Understanding and Influencing Social Media Users. The paper argues that specific social media personas can be identified and more efficiently engaged by understanding their online behaviour.

“Today’s approach to social media measurement – racing to rack up the most likes, retweets, followers, and recommendations – is the wrong approach. Marketers must define success not by social media activity but rather by customer value and engagement,” declares Aimia. “Marketers often struggle to understand the true motivations and purchase intent behind customers’ social media activity. Segmentation by persona allows marketers to more successfully identify, understand and influence customers in social channels.”

via The 6 Types Of Social Media Users | Social Media Today.

Social media: a marketing dilemma for the micro-enterprise

Social media are now mainstream. They are a pervasive part of nearly everyone’s everyday life, providing, of course, you have access to a PC and smartphone.

For a micro-enterprise, the dilemma is this. The moment has passed when it is simply a question of using, or not using, social media. Nearly every solo entrepreneur is already on at least one social media site like Facebook or LinkedIn: they’d be crazy not to be.

The primary decision is purely a marketing issue: there is a substantial difference between involvement in social media and social media marketing.

Smallholder selling lemons

Would social media marketing be relevant to this drinks stall?

Marketing is used to identify customers, to retain customers and to satisfy customers. It is also about being crystal clear about who these potential customers are and exactly how your product or service will satisfy them, beyond expectation. So, as a micro-enterprise, you should ask yourself the same question about using any tool in marketing: will my community of potential customers actually use social media? They might not.

If the answer is no, then use social media for other business functions like advice, sharing ideas, making useful contacts and administration.  If yes, then get ready to face up to all the possibilities, good and bad, presented by regular and immediate online communication with prospects and customers.

Your marketing strategy should include a digital marketing plan which should consider tools like a website/blog (which are increasingly combined), email marketing, social media marketing and content production. It will include marketing communications (identifying and retaining customers) and customer service (satisfying customers).

I have met small businesses which flourish without using social media marketing but rarely come across a business where social media hasn’t been relevant at all. We are all human and most of us are hypersocial. Social media gives us a reach and interactive capability which would have been unimaginable even five years ago. I have come across people that find the technology, etiquette and emphasis on ‘social’ quite challenging.

As a micro-enterprise, you can adapt and change and learn quickly. Your flexibility is your strength. Larger businesses are struggling with the transparency, openness and honesty that social media demands. You could even build social media into your product or service and become what has been called the hyper-social organisation*. And really differentiate yourself.

*The Hyper-Social Organization: Eclipse Your Competition by Leveraging Social Media; Francois Gossieaux and Ed Moran; McGraw-Hill Professional

Question on LinkedIn: how are you helping traditional clients embrace digital?

There are two strands to an organisation’s evolution into digital thinking.

The first is a communications challenge: this involves integrating website, email marketing, social media presence, SEO, blog…with the internal processes behind content production. Allied to this reorganisation is a change of attitude to one of listening to digital buzz, analysing and adapting to feedback from relevant communities.

The second challenge is realignment to new thinking: in the hearts and minds of senior management. They are already under pressure but time must be made for a workshop on how digital interaction needs a new management philosophy, one of openness, transparency and honesty.

Under traditional command and control hierarchies, this doesn’t come easily. Information used to be power. Now sharing information is power among the digital communities talking about your business every day.

Digital embraces recruitment, customer service, marketing, sales and manufacturing.

My help consists of a programme of workshops allied to some direct, hands-on help in getting marketing communications systems re-engineered. The returns can be phenomenal.

When should we jump into the latest social media tool?

The savvy e-marketer asks: “Will the tool help me reach and open a dialogue with customers and prospects more effectively and efficiently than my current toolset?”

If there is a more effective way to use your marketing resources, then use it. As far as Web 2.0 goes, take some simple advice: find out where your customers are online and what social media they are using.

Do new social media tools mean that email marketing is dead? A great advantage of email is its ubiquity: everyone has an email address. It is the world’s social network.

Email is still growing but that’s not the critical point. What is critical is that the email audience and user habits evolve, especially under the accelerating influence of Web 2.0 technologies.

All these new tools and technologies, like email itself, are conduits for content, not an end in themselves. It is not enough to email. It is not enough to Twitter. It is not enough to blog. It is not enough to have a Facebook page.

What you say, what you send, what you communicate still has to have value. In that sense nothing has changed since the day they printed the first newspaper. This isn’t a medium for just selling the sizzle; you have to be the steak at the same time.

Only invest in channels used by your audience where you know you can provide that quality and value that earns you the necessary attention and response. Each tool or channel has its own nuances and subtleties. The customers using your Web feeds might have a different focus and response to those preferring email; or Twitter; or those reading your Facebook page.