Tag Archives: social business

Salesforce and “Social Enterprise”

Salesforce #fail?

Doug Hadden, VP Products

Salesforce helps enterprises to leverage social networking. But, does an enterprise that uses social tools a “social enterprise”? Salesforce is apparently attempting to trademark the term. Bad idea.

The notion reminds me of the “Charlie the Tuna” commercials from years past – Starkist wants tuna that tastes good not tuna with good taste. Using social in an enterprise does not make it a social enterprise.

There has been robust use of the term “social enterprise” (& #socent twitter hash tag) to mean non-profit or for-profit enterprises engaged in handling a social issue. This isn’t a mystery – one just needs to search on Google. Getting into a public relations and legal battle with the social enterprise ecosystem will damage the Salesforce brand.

This is particularly damaging to the brand because Salesforce has an excellent program for non-profits that provides up to 10 users for free.

Social is a business model – using social for customer support, partner coordination and ideation. It enables customer centricity. Social enterprises are naturally customer-centric (and should be customer-centric in order to succeed.) Social tools can enable customer centricity.

Salesforce can enable social enterprises but not all enterprises that use Salesforce social-oriented tools are social enterprises.


FreeBalance uses Salesforce products. I provide more content via Salesforce Chatter in our company.


Richard Branson on Social Enterprise

Doug Hadden, VP Products

Richard Branson brings his entrepreneurial enthusiasm to “social responsibility” in Screw Business as Usual and accompanying web site and #sbau twitter hash tag.

Branson proposes a new ethic to capitalism where the private sector can augment charities and the public sector to address complex social issues. Branson suggests:

Companies have a wonderful opportunity to reinvent their charitable giving to look at how they can help kick-start and pilot some of these new models. Using the best bits of governments, business and the social sector with new entrepreneurial approaches is a really exciting area of opportunity.

This is sometimes called “social enterprises” – not to be confused with “social businesses” that use social media as part of the business model. Social enterprises, like FreeBalance, focus on “wicked problems”. (For FreeBalance, it’s global good governance.) Although it is true that social/customer-centric is an ideal business model for social enterprises because it provides the appropriate feedback loop for customer innovation.

The CSR Meme

This book is indicative of the maturing of Corporate Social Responsibility (CSR) to something more profound. As Branson writes:

It should no longer be just about typical ‘corporate social responsibility’ (or that horrible acronym CSR) where the ‘responsibility’ bit is usually the realm of a small team buried in a basement office – now it should be about every single person in a business taking responsibility to make a difference in everything they do, at work and in their personal lives.

It’s high time to get sustainability into the “C-Suite” as a fundamental business model. Branson knows that the “CSR” acronym has lost meaning. We may remember this book and Howard Shultz’s Onward as milestones in the maturing of CSR thoughts by coming from respected and successful business people. (Yes, both book are self-promoting, but this might convince many business leaders to head on the sustainability business path.)

There’s no question that “the business of business is business” mantra is losing credibility.

Branson weighs in on this:

One of the more devastating theories of the 1970s was that no matter what it took to achieve it, the primary purpose of business was to maximise value for its shareholders.  This principle has led to a variety of social ills where businesses discard employees (at the drop of a hat), pollute our air and waters, or create shot-term gains that are unsustainable. It is important for people in business to recognise that long-term shareholder value is more likely to be created by companies that value their employees, act as good environmental stewards, and think long term in general.

I believe that we are seeing a maturity is business responsibility as shown in the diagram from thinking that the purpose of “profit” is to make a sustainable business to where sustainability is needed to ensure that the business is sustainable. The important takeaway from Branson is that environmental and financial sustainability is good business because it sustains the business. And, that profit can drive innovation to augment the efforts of non-profits and the public sector.

CSR Cynics

This book is not going to convince the CSR cynics who view responsibility as a marketing ploy or as a cost centre that reduces profit. These cynics do not see the transformational benefits for businesses to consider sustainability as a business model. Screw Business as Usual is a bit too enthusiastic for the serious curmudgeon. The book is filled with too many exciting anecdotes – albeit, lots of anecdotes. Branson gushes. He name drops. This won’t help the CSR deniers to see the errors of their ways.

But, it’s going to help practitioners to justify social innovation.

Screw Business as Usual is not a “how to” guide. It’s high time for us to update our guide from a few years ago given recent research. It’s not hard to agree with the Amazon reviewer, who wanted more.

How to Become a for-Profit Social Enterprise (FOPSE)

Social is a Business Model

Doug Hadden, VP Products

Christoph Schmaltz of the Dachis Group (@christoph) has described what I’ve been trying to get at with some recent blog entries. His July 28 post From traditional business to social business is essential reading for anyone to understand the business transformation enabled by social media.

My sense is that many business people view social media as another channel. They expect to see traditional metrics to justify social media cost. My view is that social is really a different business model so the old metrics won’t work.

Christoph provides effective contrasts between traditional and social businesses. (And good graphics too.) These contrasts are:

  1. From transaction to interaction
  2. From B2B/B2C to P2P
  3. From gatekeeper to platform provider
  4. From hierarchy to network

Technology and Change

Many observers believe that technology does not fundamentally change society. I’m more in the McLuhan school. For one thing, the four characteristics of the social business where virtually impossible to support in the pre-Internet age and not on a global basis until quite recently.

  1. Multiple interactions between company and customers were at a high cost to both company and customers – the “your call is important to us” phenomena
  2. P2P support and influence networks were difficult to organize in the era of controlled collaborative tools where security, control and compliance restricted flexibility. Also, there was little ability to create self-organized networks of like-minded people outside who were not physically in the same geography.
  3. Supply and information chains required economies of scale because of the cost of information dissemination. Acting as a platform provider gained momentum through the open source movement and the development of social development tools.
  4. Command and control was the most effective means of managing large organizations in the industrial age. Specialization was key. Now, social networking tools enable the network of communications within organizations and supports freer flows.

Big Deal, so you think FreeBalance is a Social Business?

I believe that FreeBalance is one of the new breed of social business as a for profit social enterprise. Don’t get me wrong, I’m not saying that we’ve got this all figured out. Here’s how we are approach the four characteristics:

  1. Engaging customers and domain experts using social media. Yes, we tweet our press releases. More importantly, we interact. My analysis a few months ago is that we tweet more than the combination of the official tweets from the top 6 ERP vendors. (If you imagine the ratio of tweet per $ of revenue, you will see how FreeBalance is a bit of an outlier.) We see these activities as part of our non-virtual activities at public financial management conferences, academic presentations and transparency unconferences.
  2. Extending our learning to social media. We share what we have learned. (As we are doing now.) We listen more than we talk. We also see this as an extension of our non-virtual activities as we produce case studies and articles of how countries have effectively reformed public financial management. Where the use of FreeBalance software might only be incidental to the whole story.
  3. Becoming a platform is more challenging. We’ve leveraged Ning for a Customer Exchange which has had limited impact to date in getting the critical mass we’d hoped for. But, that’s the reality of social networking – it enables change as you learn good practices. We also see this as extending our non-virtual activities, particularly in the FreeBalance International Steering Committee (FISC) where our customers gather to share good practices, brainstorm about PFM trends and revise our product roadmap. We bring in experts in the PFM domain and futurists.
  4. We re-organized in a matrix-network approach that results in more FreeBalance staff exposed directly to customers. We’ve sent product developers to client sites to fix problems. We use collaboration and content management tools in-house and with customers. We’ve got global development integrating product management and product development using mostly open source tools.

How do you justify the ROI of Social Media?

We don’t. Why not? Because we’re a social business. Any tool that enables us to interact better with the PFM domain is worth considering. It is almost impossible to calculate the value of the insight I’ve received from tweets and blog entries that has led to an improved product vision. I’ve engaged people who have explained the why behind the what.


Social in Business? Rather, Social Business

Can “Social” be Justified in Business?

Doug Hadden, VP Products

Many business leaders question the value of social networking. So the consultants and analysts are at it again with return on investment spreadsheets, warnings, damn lies and statistics.

And, many corporate social networking initiatives are meager at best. That’s because these firms see social media as another broadcast channel: press releases and opinion and listen to see if anyone is hurting your brand.

Social is a Business Model

Social is not a channel. It’s a fundamental way of doing business. Social businesses have many of the following characteristics:

  1. Customer-intimate with customer-centric processes: there is significant overlap among “departments” to support customer requirements. Marketing departments engage customers and domain experts. Product management is integrated. As are support and sales. This is not an operationally efficient model, but it is customer effective.
  2. Social enterprises: for profit or not for profit companies focused on specific social needs like clean water, green technology or governance. Social enterprises recognize that traditional business models need to change. Business models and methods adapt to suit the social need.
  3. Networked: organizations that participate in domain events, academic studies and discussions with like-minded individuals are social. These organizations learn and adapt. Networked organizations are more able to migrate to the virtual networked world.
  4. Learning organizations: many larger organizations have a culture of expertise. Leaders believe that they are ahead of the curve, thought leaders, little to learn from the crowds. Social organizations are always learning and sharing what they’ve learned.
  5. Sustainability: social businesses want customers to be continue buying products and services. These organizations understand their environmental impact and the total customer costs. Social businesses drive down long-term customer costs.
  6. Transparent: holding knowledge is no longer power. Sharing knowledge is power. Social organizations are forthright and accountable. Transparency is the new currency of trust.

Our experience at FreeBalance

FreeBalance is a for-profit social enterprise (FOPSE) focused on governance and public financial management. We leverage a number of social networking tools. We’ve discovered many interesting phenomena:

  1. Making a direct connection between a social media posting to a sale is almost impossible. We find that social media adds to the company credibility and supports our social networking activities outside the digital world.
  2. Valuable product and process ideas have been generated through social media interaction with experts in the governance domain.
  3. More effective use of corporate social responsibility initiatives have occurred thanks to learning good practices from practitioners.