Digital Business Ecologies: How Social Networks and Communities Are Upending Our Organizations

As we’ve watched digital networks reshape just about every aspect of business these days, I’ve found that we’ve struggled to come up with the right words and ways to describe a very different way of working. From vast app stores and pervasive streams of big data to enterprise social networks and customer engagement, the rules that Internet-based models of business impose are often very different.

Yet some well-known elements of business haven’t necessarily changed and have only become more pronounced: For example, scale is one of the single biggest challenges in moving to digital and social business, but has also been a challenge in our globalized world for some time. Today’s pervasive network connectedness is making this factor ever more pronounced. For organizations now this typically means having to maintain tens of thousands, or even millions, of simultaneous conversations with the marketplace for critical activities such as marketing, sales, and customer service. It also means most businesses will have to manage an order of magnitude more suppliers, business partners, and other 3rd party relationships (example: open APIs are a great harbinger of high scale in digital supply chains.)

Thus, the challenges of magnitude infuse everything in digital: Distribution, supply, engagement, control, competition, and even — or perhaps especially — security and sustainability. However, in other areas, especially where digital and social networks fundamentally change the fabric of things, we still don’t have clearly identified constructs, or even good words that we can use.

For instance, it’s been abundantly clear for a decade now that open digital communities are a new and revolutionary construct that have gone on to literally change the world. From upending media and software (social media and open source communities, respectively) to remaking the fundamental nature of how business in all industries gets done (collaborative economy), large, self-organizing communities are taking the lead. Digital technology even changes the underlying forces of the age-old concept of community. For example, even though the idea of community has been around since there have been people, the digital incarnation seemingly does something a bit different: Instead of forming insular walls that group people together, digital communities tends to group people together and break the walls down.

It’s here that I think we’re missing the name of a key concept, or at least, we’re not using one that needs to be applied here. Specifically, I believe that the relationship between the traditional enterprise and online communities has been greatly underexplored. For sure, we have many good examples now of enterprise communities that have created results across our value chains today.

But what we don’t have is a good understanding of what relationship communities should have to business at a strategic level. Are communities an adjunct to a specific function under certain conditions, such as customer service communities or product development/innovation communities when existing traditional processes underperform? Are communities to be the primary delivery model, or a secondary? My belief is that this thinking is now too incremental.

Instead, I believe businesses should now focus directly on moving to community-led business structures and processes as a first class citizen. The force multiplier of social technology here has simply proven far too great not to put at the core of our businesses, and not doing so has begun to have significant competitive and sustainability implications.

To get there, we need to talk about digital communities and business in new ways that explain their new relation to the enterprise much better than we do today. I’d like to suggest that as digital business practitioners we starting exploring this landscape in the form of ecologies, when we talk about business and community. Why ecologies? Because of what the term means:

Ecology (from Greek: οἶκος, “house”; -λογία, “study of”) is the study of interactions among individuals and their environment.

Therefore, it behooves us to much better understand — in relation to our stakeholders — the exact nature, interaction, and possibilities of communities and business, a twin environment we’ve not really had before in business as the highest order concepts. The motivation here is that the new fundamental environment for business in the 21st century is the digital network, and specifically, online communities of every description. Given the way they are upending what’s possible in terms of how to achieve just about every function in business, it’s time we capture a more complete conception of their role. I believe this means articulating their centrality to the operating model of many or most activities in the enterprise today.  While that sounds like a bold statement, I believe the results we’ve seen so far (see the nearly 100 case examples we put in Social Business By Design for a small sample) fully bear this out.

As my good friend Stowe Boyd recently wrote [my emphasis]:

We need a CDO-style figure in most businesses — if not the CEO — to make that transition to a postnormal footing, where work technology is at the core of what everyone does, not an afterthought or add-on. The inability of traditional IT to deliver on the promise of today’s technology is the universal business facepalm of our day.

Network technology is dominating the transformation of business today. Now we need to successfully adapt our management theories and practices to this new reality.

Additional Reading:

Digital diaspora in the enterprise: Arrival of the CDO and CCO | ZDNet

What Most Digital Strategy Underestimates: Scale and Interconnected Change | On Web Strategy

A new reality between the CMO and CIO | ZDNet

Enterprises and Ecosystems: Why Digital Natives Are Dethroning The Old Guard | On Web Strategy

Four key takeaways for digital transformation | Econsultancy