Much is attributed to innovation and the perpetual race to claim ownership of the next big idea. But while many are focused on building a better mousetrap and reinventing the wheel, the answer for how to sustain a competitive business in the current market eludes them.
According to author Mark Fidelman, “Many organizations that start with the right product at the right time believe the music will never stop. They either become serial optimists or incumbents who are unwilling to cannibalize their cash cow.”
So what happens? All-to-frequently, we hear that yesterday’s business rock stars have either filed for bankruptcy or gone out of business because they refused to reinvent themselves in the eyes of their socially savvy, digitally connected consumers.
It was English scientist Charles Darwin who founded the theory of evolution in the mid 1800’s, claiming that by order of natural selection, only species that have learned to adapt to their environment will reproduce and survive, while others die out. This theory is analogous to the business world, as it stands as a reminder that the industry is always changing. In order to remain competitive you must adapt or die.
“We’re witnessing a massive shift from brands and traditional media to customers and social communities, and people expect more from brands” said Fidelman, in his new book SOCIALIZED! How the Most Successful Businesses Harness The Power of Social. A July 2012 survey of 2,400 consumers by Arnold Worldwide reveals that 60 percent of social-network-fueled customers expect brands to respond quickly to their requests or risk losing the sale.
So you’d think businesses like Netflix, whose decision to divide its products and raise prices cost the company more than 800,000 customers and two thirds of its market value, would be scrambling hard to figure out how best to break free from the reactive mode they’re stuck in.
Not so, according to Fidelman. In his experience, the majority of businesses are still waiting for the next big thing to hit the fan before taking any action.
“Most are stuck in an old management mind-set of command-and-control that emphasizes ‘Do as I say’ and not ‘I want to hear your opinion.’ As a result, they are ill prepared for the colossal challenges that confront them.”
Herein lies the problem: a rigid leadership model causes employees to lose motivation, and an overreliance on expensive and generally worthless focus groups leaves customers feeling unheard, unsatisfied and disconnected.
In contrast, most of the executives from high-performing social organizations that Fidelman interviewed for Socialized! are learning as much or more from employees and thought leaders than they are from industry analysts and traditional sources.
“A successful business in the social age understands and rapidly adapts to change,” added Fidelman. “It’s open to failure and learns from it. Businesses must recognize that their success depends on creating a cultural framework that harnesses the wisdom of the organization. Such a framework must include collaboration and social technologies that make it easy to capture, store and share organizational intelligence.”
In hindsight, it makes me question whether the executives of companies like Kodak would have succeeded in killing any attempt to create non-revenue-generating mobile or social applications like Instagram, if they were in constant communications with empowered communities. Somehow, I doubt it.
What steps are you taking to become a social business? Your future success may very well lie in these efforts, and the livelihood of your business may depend on it.
Mark Fidelman’s must read book, Socialized! How the Most Successful Businesses Harness the Power of Social (Bibliomotion, November 2012), and is available 11/15 at bookstores nationwide, as well as at all major online retailers.
You can get your FREE copy of Socialized! when you register for BusinessNext Social, the world’s premier social business conference by 11/21. http://biznextlive.com/2013-lv/.