Page 2 of 2 If you want your company to tap into social power, a range of emerging software products can help you do so. Some aim to make it easier to conduct an ongoing dialogue with customers. But a thriving industry is also building tools to harness employee power inside a company. Four prominent businesses offer their version of a hybrid Twitter/Facebook for employees: Salesforce.com with its product Chatter, IBM with its Connections software, as well as startups Yammer and Jive, which just announced it intends to go public. The aim is to tap a company’s internal social energy to speed collaboration and innovation. Craig Herkert, CEO of SuperValu, which owns or supplies over 4,000 U.S. grocery stores, is a convert to Yammer. “With the old way, all information flowed via e-mail. Now store managers and support staff all over the country can post on Yammer what they’re doing, what they’re proud of, or say, ‘Hey, I’ve got a problem. Does anyone know how to fix it?’ I have Yammer on my desktop, my laptop, my cellphone and my iPad. I can see what everyone is doing—that’s radical transparency.” A little Toronto start up called Rypple applies social thinking in a different way—for internal employee management. Its social evaluation tool lets everyone in a company rate everyone else and gives people continuous real time feedback. It taps social and peer pressure to make job evaluation more effective at driving future performance. The product was largely developed in a beta installation at Facebook itself, whose internal organization strives to be flat and unbureaucratic. (At Facebook newly hired product engineers get a few weeks of technical training and then pick a team to work on.) Anne Benedict is senior vice president of Global Talent at MediaBrands, which has started rolling out Rypple to its 6,500 people. “The highest-value employees are introspective enough to want feedback on themselves,” she explains. “MediaBrands is a media agency, so the technology is perfect for us, because it promotes the use of social networking we preach to our clients.” The humility and authenticity that social power demands of you can yield numerous benefits with customers and employees. Nadira Hira, 30, is writing a book to be published next year about attitudes toward work in her generation, those who are roughly 16 to 32 years old today. “What many companies get wrong when they think of ‘social’ is they think of it as a marketing ploy, rather than as just a way of extending what you already really are as a company or a brand,” she says. “If you do care about your employees and your customers, it allows you to show it and extend your reach.” Tony Hsieh, CEO of Zappos, used Twitter and his personal blog in late 2008 to announce and manage unexpected layoffs. He talked extensively about what was happening and how painful the process was for himself and others in the company. The layoffs went surprisingly smoothly, especially after he responded to feedback by, for example, extending an employee discount until after the holidays. When confronting social power, you might as well jump in with both feet, because you just can’t hide. “One common mistake of old-school companies is to ban social media across the company,” says Clara Shih, CEO of HearsaySocial, whose software helps businesses, mostly consumer brands, manage their social media. “But at least in America our job is such an important part of our identity that most people want to talk about it. Passionate employees are going to talk about the brand and the company on Facebook and Twitter and LinkedIn.” When her clients defend lock-down policies against social media, claiming they’ve successfully kept employees offline, Shih unleashes Hearsay’s “rogue page finder.” For one big company it recently turned up 60,000 different social media pages where employees mentioned or discussed company matters. (Not to mention the thousands of employee profiles on LinkedIn.) Hearsay’s tools presume something elemental in a world of social power: that the empowerment of employees is directly tied to the empowerment of customers—because they will inevitably end up working, maybe even conspiring, together. Ordinary people often seem better at managing and accessing information than the giant corporations they work for or buy from. “Companies literally don’t know what’s being said about them,” says millennial maven Hira .“They don’t even Google themselves!” Move up Move down 12 images Gallery: Agents of Corporate Change Video: Yammer, Chatter, Jive, Or What Should We Use? Video: Why Techonomy? But that’s the first thing somebody will do if they’re thinking about going to work at that company.” This is a critical shift in power. “In the old days the managers were on phone calls and in briefings. They had information,” says Chris Cox, who oversees product at Facebook. “The underlings were just working away. But with technology that makes it easy to share and organize stuff, that imbalance goes away.” Adds David Sacks, CEO of Yammer: “‘Information is power’ used to mean that hoarding information gave you power. Now we’re seeing that sharing information is power. The more you can share, the more you can help other people—and the more it becomes apparent you’re an expert and a valuable employee.” Long before most of us saw it coming, Ray Ozzie, one of the software industry’s most celebrated communications toolmakers, focused his product-development career on a shift toward social power. But he still doesn’t think companies get it. Ozzie replaced Bill Gates as Microsoft’s chief software architect after the company bought Groove Networks, which he founded. He left Microsoft last year. “Individuals are elated with these new capabilities, yet corporations are as risk-averse as they always were. Many companies are hesitant to create a culture that permits self-empowerment because they are afraid of what might happen if people did things by themselves.” Ozzie’s creation of Lotus Notes back in the late 1980s aimed to arm employees with better information and allow them to collaborate in teams. But though it was a commercial success, Notes’ potential to promote employee empowerment went mostly unrealized. Since then, however, powerful collaborative software—notably Facebook but also Skype, LinkedIn and other tools—has crept into corporations over the Net and in handbags and pockets, carried by employees bringing superior consumer software into the workplace. Companies are still scrambling to catch up, and most of them probably never will. Consumer technology will remain better and cheaper than what’s made for business. The larger size of the consumer market attracts more investment and innovation, and economies of scale drive down prices—a formula at the heart of the relative empowerment of the individual over the company. David Stein, Co-CEO of Rypple, says that for ordinary employees “the expectation now is that the tools people use at work are as easy and fun as the ones they use in their personal life. If you use 1950s-based management systems, employees are going to revolt. They don’t want to feel like ‘the man’ is just telling them to do things.” And at Skype, CEO Tony Bates isn’t bothering to target the business market, because, as he says, “individuals are bringing it into business themselves. In many companies Skype is the number one form of communications.” Shoshana Zuboff has been describing this fundamental shift toward individuals and social power since 2002. That’s when the longtime Harvard Business School professor and historian co-wrote The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism. She says the clash between empowered people and hierarchical institutions was set in motion in the 1950s. “The mass-production economy provided existential security for many, many people,” she says. “That, in turn, produced a new human mentality—of a self-determining individual. This mentality was once the unique precinct of the elite: the wealthy, artists, poets, philosophers. And it became the mentality of everyone.” She now argues for an urgent rethinking of how all business is conducted. “We’re talking about a fundamental shift away from a mass production model,” she says. “Value has been understood as something companies create: How do I take what I have and sell it to you? But in this new world value is not created inside the organization. It rests in the unfulfilled needs and desires of the individual. Now I have to come to you and say, ‘Who are you? Tell me about yourself. How do you want to live?’” She says the music industry notoriously failed at this in the past decade. “It brought forward the value it had created—the CD. And if you didn’t want it, how did they respond? Well, how about if they hunt you down and put you in jail?” An increasing number of enlightened companies aim to turn social power to their own advantage by putting customers not in jail but on a pedestal. They become healthily obsessed with what’s said about them online. Gatorade now operates a full-time social media command center where it not only monitors what’s said about it on Facebook, Twitter, blogs and elsewhere,but also intervenes when appropriate to clarify or offer assistance. And Domino’s Pizza responded somewhat brilliantly to that egregious employee video in 2009 with a self-effacing social media and advertising campaign that did not pretend the incident hadn’t happened. By mid-2010 it had regained market share and dramatically boosted online reputation and e-commerce sales. Farmers Insurance uses Hearsay Social’s software to help 15,000 agents nationwide maintain their own Facebook pages. It has even begun marketing itself, aptly enough, in the Farmville game people play inside Facebook. Ford takes cues from young people immersed in social media in how it designs cars and how it communicates. “Digital suffrage is upon us,” proclaims Venkatash Prasad, Ford’s high-wattage leader of product social networking efforts, in an e-mail. “Everyone has a right to a byte of the action, and we have embraced this might of the byte within Ford, through the use of internal and external social networks.” Prasad brags that Ford recently sent a car across America, tweeting: “Not a human in a car, a car.” Adds Sheryl Connelly, Ford’s manager of consumer trends, in another e-mail: “If you want to reach a millennial, you have to go where they live, and that means online. Millennials want more than engagement. They want their contributions to be meaningful.” Accepting social power as inevitable can significantly change the kind of products you design. Coca-Cola is installing machines in fast-food restaurants that allow customers to formulate their own beverages. No longer choose just a Coke or Sprite. Now you can come up with new flavor combinations and other customizations that your newly empowered heart desires. If you ignore these forces, you will probably fail. Says consultant and author Gary Hamel: “The underlying principles on the Web of natural hierarchy, transparency, collaboration and all the rest—those characteristics are going to have to invade management. The idea of a hierarchy that fundamentally empowers the few and disempowers the many is more or less dead.” To demonstrate what’s possible in this new world, Hamel helped spearhead an online forum for Web-influenced management ideas at www.managementexchange.com. Don’t think that the trends in technology, and resulting social power, will ever give you a respite from the tides of change. Says Microsoft and Lotus veteran Ozzie: “All this was unstoppable from the moment somebody installed the first network—this steady march toward reducing friction and reducing transaction costs faced by individuals. And you ain’t seen nothin’ yet.”