What Exactly is a Social Business?

In March, Jive Software created a new market category — Social Business Software (see my post on the announcement.) Jive published a manifesto that contains their definition of Social Business.

“The Social Business allows and rewards open conversation between colleagues, partners and customers. It relies on the power of social connections to shape new products and services, and to propel new revenue and earnings growth. It embraces Web 2.0 technology in the form of Social Business Software to enable this critical change.”

Jive’s definition is a good start, but ultimately does not go far enough. It implies organizational, cultural, and technology elements, but does not explicitly invoke all of those terms. Also, there is no mention of business process in the definition.

In June, partners at the Dachis Group began publicly touting Social Business Design as a new category of professional services. The volume was turned up on the concept last week, when Dachis acquired Headshift. Even I noticed the forward momentum, in this post, saying that “It would be difficult to overstate the importance of this action, as it instantly legitimizes social business as a management discipline on a global scale.”

While the Social Business Software and Social Business Design labels have gained increased usage, there is a problem with the common, core component of those phrases — Social Business. A Google query of the term produces a well-established definition that does not even apply to social computing:

Social business is a cause-driven business. In a social business, the investors/owners can gradually recoup the money invested, but cannot take any dividend beyond that point. Purpose of the investment is purely to achieve one or more social objectives through the operation of the company, no personal gain is desired by the investors. The company must cover all costs and make profit, at the same time achieve the social objective, such as, healthcare for the poor, housing for the poor, financial services for the poor, nutrition for malnourished children, providing safe drinking water, introducing renewable energy, etc. in a business way. The impact of the business on people or environment, rather the amount of profit made in a given period measures the success of social business. Sustainability of the company indicates that it is running as a business. The objective of the company is to achieve social goal/s.

If Enterprise 2.0 and Social Media advocates are going to try to hijack the phrase Social Business, there must be a clear, consensus definition in place. Since an adequate definition is currently lacking, despite Jive’s good attempt, I thought I would write one and start a communal process of building something we can all use moving forward.

My working definition of Social Business appears below. Please comment extensively on this, even at the level of specific word changes. Also feel free to invite others to read the definition and comment (directly on the blog please). I will gather and consider all comments, then revise the definition and re-post. Thanks in advance for your feedback!

Social Business: A business philosophy that emphasizes employee trust and autonomy as an alternative to hierarchical command-and-control management. Additionally, the philosophy views customers and business partners as trusted components of the organization, not as external constituents. The philosophy should be supported by appropriate organizational design, culture, business process, and technology strategies and investments. Like any other business philosophy, Social Business produces results consistent with accepted definitions of a viable, on-going business.

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12 responses to “What Exactly is a Social Business?

  1. Pingback: Twitter Trackbacks for What Exactly is a Social Business? « Together, We Can! [lehawes.wordpress.com] on Topsy.com

  2. I suggest there are 5 dimensions to the “social business” definitions hinted here: http://pic.gd/e3d9c7
    Social as business philosophy is one dimension of the conversation. Social as communication channel is another. Technology cannot be ignored either — though I would not lead with it as the definition. Technology has at least two dimensions — 1. is the underlying technologies that enable this space to exist (things like rich internet applications, that did not exist 10 years ago, limiting us to client/server apps that had little virility and 2. the actually tools that are enabling social behaviors online.

    Let me know what you think of this slide. Does it help?

  3. Pingback: Dachis Group’s David Armano on Social Business by Design | Gauravonomics Blog

  4. Pingback: 20:20 Social: Social Business Strategy — Blog — Dachis Group's David Armano on Social Business by Design

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  6. Pingback: 20:20 Social: Social Business Strategy — Blog — Decoding Social Media Marketing and Social Business Strategy

  7. I find your definition quite good. There is only one point that may be very confusing. Originally Social Business has nothing to do with the way we use the word “social” for a lot of things (http://en.wikipedia.org/wiki/Social_business). There is quite the same issue with social innovation that some consider as synonymous with open innovation while the majory use it for society related issues (http://en.wikipedia.org/wiki/Social_innovation).
    But this point has nothing to do with your definition itself.

  8. Larry – hijacking and rephrasing is nothing new, although it is always a challenge when the phrases already have prior meaning that’s not at all like the new usage.

    My first inclination when Jive announced the new messaging was to turn it into an acronym – Social Business Software becomes Social BS.

    That seemed a bit harsh, given the normal meaning of BS 😮 – so I didn’t pursue it at the time, but for solution providers attempting to wield yet another new flag for a space – it’s pure positioning, and while it’s a valid tactic, unless it’s such an amazingly dead-on phrase that everyone clearly SHOULD use it, I would suggest that fragmentation of terminology only serves to stagnate the market, and not advance it. It’s still early in this curve (per your post today on Enterprise 2.0 and Social Media combining), and before we swap out terms, consolidate, etc., it might be better to continue to actually DO THE WORK of getting Enterprise 2.0 understood and adopted.

    Of course that’s part of the reason we’re doing research via the 2.0 Adoption Council (http://www.20adoptioncouncil.com/) – others can debate the terms, I’m interested in helping businesses actually get benefits, and call it what they like.

    We could all of this Portals 2.0, or Knowledge Management 2.0, or Collaboration 2.0, or even Intranets and Extranets 2.0 – but do any of those ideas add to real understanding and ACTION within businesses? Only marginally, IMHO.

  9. Larry,

    Great definition – which is quite similar to mine (posted later, but independently).

    I like the focus on employee trust and autonomy (which I would see as aspects of social capital) and mix of activities – organisation design PLUS technology etc.

    Mine is here: http://blog.social-advantage.com/2009/09/my-definition-of-social-business.html

    (together with an explanation of why I think this is appropriate): http://blog.social-advantage.com/2009/09/my-further-thoughts-on-social-business.html

  10. Pingback: Classification of Enterprise 2.0 use cases

  11. Weighing in on the evolution of a Socially Designed Business: “The social context has evolved from “friending” to mainstream media to supporting a more socially designed business.” http://bit.ly/10t2OW

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