The Hyper-Social Organization: Eclipse Your Competition by Leveraging Social Media

By Francois Gossieaux and Ed Moran

The definitive, maximum-impact guide to using the transformative power of social media as the ultimate competitive advantage

About the Book
In The Hyper-Social Company, Ed Moran of Deloitte and Francois Goissieaux of BeelineLabs identify how (and which) social media are fundamentally changing core business processes and the way businesses and customers interact. These changes are being driven by what the authors call the “Hyper-Social Shift.”

Through interviews with more than 500 companies and studies of social media, Moran and Goissieaux have gained radical new insights into the advantages many businesses have derived from new technologies and practices. From these findings, the authors have developed self-analysis tools—including the Hyper-Sociality Index (HSI) profiled in this book—that leaders and mangers can use to assess their enterprise’s Hyper-Sociality; pinpoint which parts of their organization are ready to make the leap; and benchmark their progress against competitors, or against their industry as a whole.

• Language: English
• Publisher: McGraw-Hill Education
• Release date: Aug 20, 2010
• ISBN: 9780071741187

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part one

RESIST THE HYPER-SOCIAL SHIFT AT YOUR PERIL

one

How Did We Get Here?

How Social Media Drives Hyper-Sociality and Why Businesses Must Change

Most companies that are thinking about leveraging social media as part of their business—whether in marketing, customer service, new product innovation, employee communications, or public relations—see it as a new way to reach people. They focus on the media in social media. Missing from this strategy is the idea that social media is not about media, nor is it about Web 2.0 tools or the new rules that govern them. Social media is all about our social nature growing to levels never seen in human history. Social media is about certain Human 1.0 behaviors finally taking hold in the business world, where they’ve been long absent.

Industry guru Tim O’Reilly calls social media a platform of participation, and that is exactly what it is: a massive platform of participation. Social media allows us to behave in ways that we are hardwired for in the first place—as humans. We can get frank recommendations from other humans instead of from faceless companies. When things don’t work out, we can get mad at people instead of organizations. Our reciprocity reflex,¹ which enables us to be the only Hyper-Social species without all being brothers and sisters, can once again take center stage. We can help others and be helped. We can form tribes again—except that this time, our tribes will not be bound by geography, and we can belong to multiple tribes at the same time.

Social media is what has enabled the hardwired Human 1.0 behaviors to scale to levels never seen before in business; we call it Hyper-Sociality. And while some people will argue that our social behavior changes when it becomes virtual and large-scale, as we are seeing now, early research on the topic has the social science community thinking that our social behaviors won’t change.²

Human 1.0

We may be living in a Web 2.0 world, but the behaviors that this new environment triggers are solidly Human 1.0, and they can largely be explained by the evolution of humans to become the only Hyper-Social species without all members having to be related.

What we buy and how we buy have been studied extensively by evolutionary biologists and behavioral economists. For instance, the way people seem to want to help others and be helped is caused by a reflex called reciprocity; the fact that we like to mimic others is caused by what are called mirror neurons; the reason that we like to look cool, at least on a subconscious level, is that it may help us find a better mate; the reason we buy the same things over and over again, even if it makes no sense, is that we are herding animals and in some cases self-herding. What this means is that if we buy a jar of fruit preserve for no good reason, and we sort of like it, we will keep buying that brand forever. We are creatures of habit, perhaps because that consistency makes it easier for us to make decisions. All of these behaviors have been hardwired into us over thousands of years of evolution, and have permitted us to be as successful as we have been.

In contrast, the modern business organization is quite young. Throughout its short history, business structures required us to behave in ways that were unnatural. Think, for instance, about the specialization of skills, or about the unnatural interactions resulting from the information imbalance that exists between producers and consumers of goods, or between employers and their employees. That unnatural environment has also caused companies to develop many bad habits along the way—both with customers and with employees.

It wasn’t until recently that customers were asked to provide input into the design of new products and services, and for a good portion of the history of the enterprise, people had very limited choices—you could buy a Ford as long as it was black. Fake-sounding commercials touting the virtues of goods and services became commonplace. These messages worked because they were the only source of information that consumers had, and because there were few other channels of communication that were vying for their attention. In typical business jargon, companies started using war metaphors to describe their competitors, suppliers, and customers—and in some cases they started behaving as though they really were at war. Marketers mounted campaigns to pitch new products, and fought for marketshare, against entrenched competitors, all the while fighting to win new customers and raise barriers to entry.

Internally, some companies came to treat their employees as commodities, or interchangeable cogs in a big machine. Transparency was something to be shied away from; instead, companies embraced secrecy and sometimes deception. The rumor mill at the company water cooler had very limited reach and little impact, and it could basically be controlled. Command-and-control methods of management took hold (and to a far greater extent than efficient organizational theory would call for), limiting communication within the company mainly to vertical silos and between small groups of people who had direct reporting relationships.

A by-product of all this command and control is that trust in business virtually disappeared. In fact, according to the 2009 Edelman Trust Barometer,³ trust in business continues to decrease, with trust and credibility hitting an all-time low in Edelman’s tenth annual study. When trust disappears from an environment, everything becomes more expensive for everyone. For producers of goods and services, it means that they need to spend significantly more on marketing and sales to achieve the same results with skeptical customers. For consumers of goods and services, it means that they must conduct a lot more due diligence before making their buying decisions. Fortunately, as we will see in later chapters, Hyper-Social organizations can leverage social media to bring trust back into the equation and reduce transaction costs for all parties involved.

What happens now with Hyper-Sociality is that we can behave like humans again—not like consumers or human resources. We can talk to one another and help one another. If we’re not happy with the company or its products, we can not only talk back directly to the company, but also talk to thousands of the company’s other customers if we choose. And if we’re not satisfied with the response, we can bad-mouth the company or the employees that wronged us, organize grassroots boycotts, and have an actual and immediate impact.

In fact, this willingness to pay a personal price in order to punish a company or person that treated us unfairly is a Human 1.0 trait as well. In his ultimate bargaining game,⁴ Vernon L. Smith, the winner of the 2003 Nobel Prize in economics, asked pairs of people to play a game that would test fairness. In the game, one of the two people receives a sum of money, say $50, and is responsible for deciding how to split it up with the other person. That second person can either refuse the offer, in which case neither person gets any money, or accept the offer, in which case both people can keep the money. If you were to put your economist hat on and consider humans as rational beings, you would predict that the second person would accept any amount of money being offered to him; after all, refusing an offer would leave him with less money, since the two people would have to return the money. Well, in playing the game all around the world, the researchers found that there is a trigger amount, which differs somewhat from culture to culture, but which is significantly different from $1, at which the second person will refuse the offer. So in effect, there is a point at which the second person considers an offer unfair and is willing to pay a personal price (giving up whatever amount of money is being offered to him) in order to punish the first person for being unfair. That is what you are witnessing when people go out of their way to bad-mouth your product or service: not only are they trying to warn others because of reciprocity, but they are willing to pay a personal price to punish you for behavior that they consider unfair.

It is also worth noting that people are more predisposed to punish other people than to punish the organization. It took us tens of thousands of years to develop this innate sense of fairness for other people. Since organizations in the modern sense have been around for only a few hundred years, we have not developed that same sense of fairness as it relates to them. When the financial meltdown happened in late 2008, people became truly outraged when a list of executives and their bonuses was published. Sure, people had been mad as hell before at what those companies had done, but the anger became visceral when they could take it out on people instead of organizations. The same happened in the summer of 2009, when British people became outraged at the parliamentary expense-account fiasco. If the scandal hadn’t had the names of specific people associated with it, the outrage would have likely been much milder.

As a company, you can try to harness this powerful force to your advantage or see it used against you. But to understand how to harness the power of Hyper-Sociality, you need to understand Human 1.0 more than you do Web 2.0 or other social media technologies.

A good example of Human 1.0 in action is the SAP Developer Network, a community with more than 1.5 million developers. When SAP first started the community, it had an incentive system in place that gave individuals a reward for helping others and helping SAP. Here’s how it worked: Every time you helped someone, that person could give you points for the help she received. Every time you were willing to help SAP by providing it with a quote in a press release or by acting as a spokesperson for it at a conference, you would get points. You could then turn those points into personal rewards. What happened next is that SAP started seeing some bullying behavior in the community. People became overly competitive with one another, exhibiting behaviors that could be characterized as aggressive. Eventually SAP decided to switch the reward system to one in which the total number of points doled out in the community would trigger donations to a children’s cause at the United Nations. After SAP made that change, the bad behavior soon abated.

If you were tuned into Human 1.0 behavior, you could have avoided such objectionable results in the first place. Behavioral economists like Dan Ariely, the author of Predictably Irrational⁵, or Ori Brafman and Rom Brafman, the authors of Sway⁶, could have warned you about what would happen.

The Brafman brothers describe a research project at the National Institutes of Health (NIH) that predicts this behavior through neurophysiology. The NIH researchers placed participants in an MRI machine fitted with a monitor and a joystick to allow the subjects to play a game. At the beginning of each game, a circle, a square, or a triangle would appear on the screen. A circle meant that if you succeeded in completing the upcoming task—zapping a figure as it appeared on the screen—you would earn a monetary reward. Different circles meant different size rewards. A square meant that if you failed to zap the figure, you had a penalty of 20 cents, $1, or $5. A triangle meant that no money was on the line.

When the researchers monitored which part of the brain was active in the various stages of the game, they found that every time a circle or a square appeared (which meant that money was at stake), the pleasure center of the brain lit up—the same center that is associated with the high that results from drugs, sex, and gambling, and that can lead to addiction. When triggered, that part of the brain releases dopamine, which creates a feeling of contentment and pleasure—and as addicts will tell you, you need increasing doses of dopamine to achieve the same result over time.

In a separate study, subjects were asked to play the same game, but instead of making or losing money, the participants were told that the better their score, the more money would be donated to charity. Now the MRI revealed that the pleasure center was completely quiet, but instead the altruism center of the brain lit up. That is the part of the brain that is responsible for social interactions—how we perceive others, how we relate, and how we form bonds.

Understanding Human 1.0 is more important in predicting how Hyper-Sociality will affect your business than understanding the tools, the underlying technologies, and the new rules that govern them. And when we talk about Human 1.0, we don’t mean only the individual characteristics that make us human and that have been tapped by advertisers for decades—we especially mean our group behavior, that which makes us social. That makes understanding the changes that are upon us and how to harness them simpler than in many of the previous waves of change.

This does not mean that the changes are any less profound—on the contrary. As we will see later in this chapter, they are truly game-changing. The good news for business is that the impending changes can be anticipated.

What Is Driving the Hyper-Social Shift?

A number of key technological shifts are enabling the Hyper-Social shift, and without the confluence of these major, long-term trends, Hyper-Sociality would be an unrealized dream of our primate minds. Several of the more important drivers are the emergence of inexpensive social media applications, worldwide connectivity via the Internet, and the blurring of the line between expert and amateur.

Since humans are so fundamentally social, we have consistently developed tools and technologies through the ages that allowed us to share thoughts and information with others in some form. Cave drawings, art, the printing press, the telephone, television, the citizen’s band (CB) radio of the 1970s, and the bulletin boards of the early Internet days all point to the desire of humanity to increase one-to-one communication to one-to-many or many-to-many.

Combined with a number of factors like Moore’s law (a doubling of computing performance every 18 months at a lower cost), the creation of common standards like TCP/IP (the technical protocols that underlie the Internet), and the ubiquity of wired and wireless connection to the Internet, the stage was set for the emergence of powerful platforms that would allow humans to act in the social mode in which they always existed. Indeed, with the scale and reach of the Internet and our natural instincts to behave as social beings, it’s not surprising that tools like e-mail, wikis, blogs, and online social networks quickly emerged. It’s also not surprising that people are spending so many millions of hours per month socializing online. When viewed in the larger context, the Hyper-Social shift is a natural result of the way we’ve always acted as humans. It’s just that social applications and the social networking phenomenon have allowed that natural behavior to scale to a level never before imagined.

Companies have long controlled the tools of production and distribution, and have attempted to influence public opinion with their large corporate budgets and access to expensive and relatively scarce informational resources like newspapers, television, and radio. Now that the tools of production (print, video, and worldwide content distribution via sites like YouTube) have dropped in price and have been democratized, virtually anyone with an Internet connection has the ability to reach a global audience, and people can easily identify and collaborate with like-minded tribes of humans.

As a result, the dynamics of communication and relative power between amateur and expert and individual and company have changed forever. Even governments and police forces are not immune. Consider, for instance, how the story of a lost Sidekick mobile phone told by an outraged citizen blogger with spare time and a basic knowledge of HTML eventually located the phone and forced the New York City Police Department to arrest the teenager who found the Sidekick and refused to return it.⁷

As Clay Shirky describes in his book Here Comes Everybody, in May 2006, a New Yorker named Ivanna left her Sidekick mobile phone in a taxi. Since no one returned the lost phone to her, even though Ivanna’s friend Evan sent an e-mail to the phone seeking its return, she purchased a replacement. When her phone company activated the new phone that Ivanna purchased, however, she was able to view her old phone’s picture library, and she saw that a woman with the e-mail Sashacristal8905 was now using the phone to take pictures. When Ivanna e-mailed the woman, the woman rudely refused to return the phone. Ivanna’s friend Evan, indignant that someone would keep what she knew wasn’t hers, posted a Web site called StolenSidekick that explained the situation and provided a picture of Sasha and her e-mail address. Viewers of the Web site eventually identified the woman by her pictures and her e-mail address on a social network. Based on the evidence uncovered through subsequent online conversations, the New York City Police Department eventually escalated the dispute from a lost phone to a stolen phone, and arrested Sasha. Such a chain of events would not have been possible only a decade ago.

Social Media: A Massive Platform of Participation

As we’ve discussed, Web 2.0/social media is a massive platform of participation that allows the Hyper-Social wave to sweep across everyone—your employees, customers, prospects, and detractors—on a scale that is beyond anything that we’ve ever seen before. In effect, social media gives everyone a voice equal to that of your company. There are numerous examples of individuals who were able to stand up to the big companies and demand rectification of their problem or force lasting changes, the most famous external example of which is probably Dell Hell, created by a well-known blogger, Jeff Jarvis.

Dell Hell started when Jeff Jarvis complained on his blog about a new Dell computer he had purchased. I just got a new Dell laptop and paid a fortune for the four-year, in-home service. The machine is a lemon and the service is a lie. I’m having all kinds of trouble with the hardware: overheats, network doesn’t work, maxes out on CPU usage. It’s a lemon.

Dell had a policy of look, don’t touch when it came to customer complaints voiced on bulletin boards and blogs, and so it did not respond to Jeff Jarvis’s complaints. What happened next was that the New York Times, BusinessWeek, the Houston Chronicle, and other mainstream media outlets picked up the story—and that is when Dell Hell really happened for Dell. Jarvis had a platform that gave him a voice equal to Dell’s, and his being social—in this case, criticizing a bad product to warn others not to make the same mistake, and punishing a company for what he considered unfair treatment—made a real difference. And by a real difference we don’t just mean that Jarvis got his problem fixed, we mean that he was able to force Dell to become much more customer-centric, which made a difference for all future customers.

Thankfully in the case of Dell, this experience allowed them to transform themselves into a best practice example of how to leverage Hyper-Sociality as part of their business. When we spoke with Erin Nelson, Dell’s CMO, he told us: We launched into it in a fairly responsive manner. One of the things that [the Jeff Jarvis situation] forced us to do, is launch into this with full force. And it wasn’t a question of the test, try, learn measure, it actually was a question almost of survival. So we actually turned what was a relatively negative situation for us into a phenomenal platform for learning, and for making sure that we really were exploring the vast opportunities these tools gave us.⁸

There are also plenty of internal examples, with the most publicized one probably being the Mini-Microsoft guy at Microsoft. In this case, a Microsoft employee decided to start an anonymous blog to shine a critical light on the inner workings of Microsoft, calling the company a passionless, process-ridden, lumbering idiot. His blog, which started in 2004, quickly became a virtual central water cooler where other Microsofties could communicate with one another. Every time the Mini-Microsoft guy posts on his blog, hundreds and in some cases thousands of other employees comment on his posts—mostly venting their frustrations without fear of retribution. So what’s going on here? Most of these people, including the Mini-Microsoft guy, are passionate about Microsoft, but disillusioned by the leadership and the official management channels of communication. So they do what comes naturally: They become social; they vent; they complain; they find support and strength in one another. They don’t mean harm to Microsoft; they truly want it to become a better company.

Internally, this platform of participation is slowly changing the way companies work. No longer are communications limited to the channels of the traditional command-and-control hierarchy. People now find ways to communicate and help one another across conventional reporting structures.

Externally, the impact of this platform is not all that different from the internal impact. People can behave the way they were hardwired to behave in the first place—humanly and tribally. As we said before, the prevalence of those tools, both within and outside of your organization, is inevitable. Like many recent technology innovations and their subsequent adoption, this one is driven not by central IT departments, but by the individual users. Companies may attempt to control what technologies take hold in the enterprise and what sites people can access, but in reality they cannot—people will find a way to circumvent these controls. For instance, when a retailer’s thousands of IT people could not access Twitter from work, many of them devised alternative ways of doing so, including using their personal iPhone to access Twitter and offer help across functional barriers.

Connectivity—Always On

At the simplest level, ubiquitous connectivity to others (usually via some sort of wireless connection) creates far more opportunity for your customers, your potential customers, and your detractors to move from thinking about your company to saying or doing something about your company. Such connectivity also permits tsunamis of sudden sentiment about your company to rise incredibly fast, fueled by the many people who are on the network and hear the chatter. An example is the uncomfortable position that Domino’s Pizza recently found itself in when a video of employees performing distasteful acts with the food they were preparing for customers appeared online. The company did not learn of the video until it was tipped off by a blogger, and by the time Domino’s posted an apology, about 48 hours after the video was posted, the video had been viewed almost 1 million times. It’s a safe bet that the company, and those other companies that were watching from the sidelines, has developed new policies for scanning the horizon and learning of events of this sort much sooner.

Another subtle impact of this ubiquitous connection with a possibly global community is the disappearing transition between stimulus and response; indeed, as we experience and think, we are able for the first time to reach hundreds or thousands of humans with our immediate, unfiltered sense of what’s taking place. With mobile technologies and real-time social applications, there will no longer be the buffer period between when we think something and when we communicate it. This transition is likely to be disconcerting and ultimately embarrassing for some, but for other companies, it will present a rush of incoming data that need to be parsed, understood, and acted on in short order.

This immediacy and real-time nature of communication will also create greater expectations of immediate response and redefinitions of what responsiveness looks like. It is hard enough now, at this early point in the process, for us to respond to all of the communications we receive, but when the Hyper-Social shift is well underway, we may find ourselves feeling inundated by our tribes’ real-time narrative of what they’re thinking and what they would like us to do.

Summary: The Hyper-Social Organization—an Anti-Fad

As we have seen in this chapter, the main driver for much of what is happening in business today is not technology, nor is it a fundamental change in media. What is really happening is that social media, connectivity, and always-on technology have allowed the Hyper-Social Human 1.0 to expand to levels never seen before and reenter business with a vengeance. That makes Hyper-Sociality the reverse of a fad in some ways. It’s not something new, as humans have always behaved socially.

Hyper-social organizations will not use social media as a new channel to reach and interact with customers; instead, they will realize that social media fundamentally changes the way you identify, develop, educate, and support those customers. Not realizing that distinction will result in companies not being able to achieve their business objectives. And those objectives have not changed; they were best described by the late Peter Drucker when he said: Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.

Your end goal has not changed; it is still to create a customer. It is everything in between to get to that goal that has changed!

In the next couple of chapters, we will take a closer look at what has actually changed and how those changes are not only inevitable, but truly game-changing.

two

The Human 1.0 in a Web 2.0 World

While early research shows that fundamental social behavior does not change as Hyper-Sociality scales, there are fundamental differences between our Human 1.0 ancestors, who roamed the earth for tens of thousands of years, and our Human 1.0 contemporaries, who inhabit our Web 2.0 world. For one thing, our ancient tribes were limited by geography, and we usually belonged to only one tribe. Now we can belong to tribes that span the globe, and we typically belong to multiple tribes at the same time.

As Rob Kozinets, marketing professor at York University and one of the editors of Consumer Tribes,¹ said in a recent interview we conducted with him: Today’s tribes have looser affiliations and are more hedonistic in nature than ancient tribes. They are nomadic by interest, rather than geography, and centered around expertise and commercial culture.²

Let’s take a closer look at some of the differences between the Human 1.0 in today’s world and in the ancient world, and what that means for Hyper-Social organizations.

How Tribes Form

Humans form tribes because they have evolved to gain advantages as tribes, not just as individuals. We developed a symbiotic relationship between individual biological evolution and culture as a way to bypass what would have taken us too long to achieve through natural evolution. This whole yin and yang relationship between individual natural evolution and culture is best described by evolutionary biologists Robert Boyd and Peter J. Richerson, who write:

Culture is information that people acquire from others by teaching, imitation and other forms of social learning. On a scale unknown in