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Dutta and Matthew Fraser, both from INSEAD business school in Fontainebleau Cedex, France, have written a book on the topic titled, “Throwing Sheep in the Boardroom: How Online Social Networking Will Transform Your Life, Work and World.” The book examines the powerful trend of the Web 2.0 social networking revolution in a number of areas, including politics, music and business. It argues that while the Web 2.0 revolution has become de facto for younger members of society, it is facing resistance inside organizations – especially corporations and government bureaucracies and makes the case that senior executives must embrace and understand the dynamics of the Web 2.0 revolution “before it’s too late” and “before it will be sweeping their corridors and into their boardrooms.”
The “throwing sheep” of the title refers to a Facebook application that users utilize to get other members attention with a quick note.
As a chaired professor of business, professor of information systems and faculty director of elab@INSEAD, the school’s initiative in building a center for teaching and research in the digital economy in collaboration with companies such as Morgan Stanley, SAP, Cisco Systems Inc. and Intel Corp., Dutta is perfectly situated to examine the interaction between online social networking and the business world. He joined INSEAD in 1989 after working for Schlumberger Ltd. in Japan and General Electric Co. in the United States. He has also authored close to a dozen books, many focusing on the intersection between business and technology, including “The Global Information Technology Report 2007-2008,” “The Bright Stuff,” “Embracing the Net,” and “Process Reengineering, Organizational Change and Performance Improvement.”
Dutta, who has a doctoral degree in computer science and a master’s degree in business administration from the University of California at Berkeley, as well as a bachelor’s degree in computer science from the Indian Institute of Technology Delhi, recently completed a short book tour of the United States with stops in New York and Boston. He spoke to the IndUS Business Journal during his Boston stop.
When directly applying the Web 2.0 social networking explosion to the business world, Dutta points toward four factors: branding, engaging, learning and leading.
Dutta says that when businesses embrace social networking they can bring their brand to a different audience. However, businesses must realize that it is a different method of branding that is less structured and more open than traditional outlets to the public, such as print or television advertising.
“You have to make people passionate about you and the way you make people passionate about you is you become more open,” he said.
Instead of having a business image as perfected, flawless and on high, Dutta believes in the social networking arena businesses and executives must come down to the people and be genuine with more transparency and less reliance on perfected, public-relations driven images.
“The traditional model is you portray your strengths, not your weakness,” he said. “In Web 2.0 culture you have to portray both – you have to be more open. People don’t want to see the sanitized version of you.”
Dutta strongly believes that social networking allows businesses to engage both its employees and customers more than ever before. This approach calls for a drastic rethinking of company values and approaches to input on both business execution and products. Whereas research and development and innovation have traditional been closed activities, they are increasingly becoming more open and succeeding through an inclusive approach that takes in views from all levels of a company and customers.
“[Social networking] technologies provide you with a way to engage customers and employees,” Dutta said. “You have to bring in new ideas from the outside … and this open innovation can be tremendously enabled by new social networking technologies.”
Social networking tools such as blogs and wikis provide a quick and direct avenue for feedback and the business world is increasingly becoming one in which product success is driven by online chatter – companies that fail to estimate the weight of such public opinion should expect consequences, he added.
Social networking has also changed the learning environment, shifting the seat of information from traditional purveyors of information such as the media and professional organizations to a larger, less-controlled global forum. The challenge is for businesses to continue to drive information on their products and services put to also be open to learning about other views and figure out a way to integrate information from outside the organization, according to Dutta.
Businesses and their leaders are now being challenged on their assertions and positions of authority.
“It requires a certain level of humanity to accept that someone else might know better and that you don’t know it all,” Dutta said. “However, the most important change being driven by these things is a shift in values.”
Businesses have typically valued information and innovation that is private and secret, but now public knowledge and information has a heavier weight, he added. Business interaction through Blogs, Facebook and other social media are now being accepted as normal and good. “The value in terms of openness is changing,” said Dutta.
He points to the increasing number of chief executive officers at large companies blogging and interacting with the public as an example. In addition, the straightforwardness of executive blogs, often addressing personal issues and opinions, is a marked change. “Maybe you want to expose personal challenges now,” Dutta said. “The boundaries are shifting out there.”
In addition to social networking’s effect on business leadership it is also having an impact on market leadership. “Today what is happening is power is much more diffused, both inside and outside the company,” Dutta said.
Whereas in the past, market leadership was much more defined by title and position social networking has broken down the barrier and brought decision-making down to the bottom level, he added. For example, Dutta points to the pharmaceutical industry, which has always relied on influencing doctors to prescribe certain drugs to tilt the direction of demand. Now bloggers and “moms” have just as much control in building momentum and popularity for certain drugs over others, according to Dutta.
The twists and turns social networking is causing in the business world are almost endless and Dutta does not expect that to change. Over the next five years, he expects to see a continued focus on the shifting values of openness and transparency, and a more definite measure for how this impacts the business world.
So just how does a business embrace social networking?
For Dutta, the first step is clear: companies must begin with strategy. The strategy must be to embrace Web 2.0 social networking, encourage horizontal collaboration and harness the power of collective intelligence to boost productivity.
“The interaction between people and customers is the strategy,” he said. “If you look at the social media state there is a lot of interaction between people and the customers because you are, in effect, one team.”
-----------------------------BY Martin Desmarais
Source：IndUS Business Journal
Copyright © 2009 IndUS Business Journal All rights reserved.
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