As more companies begin to be interested or in some cases to effectively launch new initiatives for involving customers and employees to improve their business, a possible sequence of cultural, technological, organizational maturity stages starts to show up.

Each stage is characterized by a certain level of understanding of the role that social media play in creating value, by different organizational schemes and by specific degrees of integration between internal systems and online conversations.

The evolution from one stage to the next often requires a major mindset shift in one or more stakeholders and with times that vary by the industry sector, propensity to change and the results of people-affecting initiatives (eg knowledge management, customer relationship management, etc.) run in the past.

Update November 24th. Following Mark Tamis comment, the model has been made more customer-centric adding an extra dimension (Customer Involvement) that shifts attention from the ongoing changes in internal mechanisms to the role that external actors play into the new value creation flow introduced by the Social Business.

Here is a diagram summarizing the patterns that I’m seeing in the market:

Where is my company?

To understand in which position your company is and which are the next steps in the development of your strategy towards Social CRM and then Social Business, you can use the following information.

Culture (from isolated to people centric)

• The company shows a lack of understanding of how to use social media for business or it looks at social platforms as a danger for the the productivity of its employees
• Some decision makers (typically in marketing or communication) begin to look at public social networks mostly as new channels to send out messages to clients and potential clients. Communication is primarily one-way and broadcasted very much like in traditional marketing practices. The company still considers itself on a different level than its audience and pretends to be in control of the message
• The management stops considering its customers as passive targets of top down campaigns and starts looking at them as partners in the business improvement. Before dipping its toes in the water, the organization begins to listen to what is being said in online conversations with the goal of better understanding the needs and expectations of the customers. Outcomes gained from listening activities, though, are not always translated in insights to guide strategies and initiatives in social media
• Thanks to a deeper understanding of the behaviors, preferences and needs of the market, along with a stronger awareness of the opportunities rising from online conversations, the company decides to put together a set of rules and processes that involve external stakeholders as key influencers of product development, service improvement, marketing campaigns, brand positioning. Exchanges with customers and prospects begin to be collected, analyzed and leveraged in a continuous improvement cycle that actively involves the whole organization (internal departments included).
• The entire value creation chain including customers, prospects, suppliers, employees is affected by the conversations happening between the company and its ecosystem. Marketing, service, communication, innovation, product management are constantly and in quasi-real time realigned to customer insights. Now the company understands how its products / services are being used and influence you the lives of their customers. Internal and external processes are restructured both to increase the value created for the organization and the customers’ quality of life, in a mutual beneficial way.

Organizational approach (from unaware to experience driven)

• There’s no department in charge of the company’s presence in social media and the company does not pay attention to requests for help, opportunities or suggestions that customers are a leaving anyway on the net
• Any department has the right  to launch and manage social initiatives both within and across the firewall. There is no connection or coordination between different projects so that the organization struggles to reuse resources, find and circulate best practices, guarantee an homogeneous experience to users. The commitment from top management is low or nonexistent
• One of the departments (typically, Marketing, PR, Communication) takes charge of bringing the views and demands of the market within the company. There is no single point of contact for the social intelligence activities that may be duplicated or not to be communicated to the function able to act on them. The management began to pay attention to customers but that’s not yet enough to sustain organizational change
• One of the departments collects and uses customer feedback to build meaningful business value by developing social skills, increasing the sensitivity of the whole organization, fostering the emergence of internal communities, urging the development of new processes and systems, promoting a stronger dialogue across departments that anyway remain largely separate entities. The management supports and cultivates social media as a strategic and central tool for the future of the business
• Social media stop being the prerogative of a single department and all customer-facing functions (marketing, sales, product management, customer care, innovation) are aligned under a single client-centered focus. The silos get replaced by an intensive use of communities and employees belonging to each function are stimulated to synergistically revolutionize the overall customer experience. The company goes from a behavior-type resembling Model I to one compliant with Model II in which all efforts are aimed at continuous improvement rather than to defend single positions from political turfs.

Customer Involvement

• The company is completely focused on itself. There is no role for or relationship (active, nor passive) with the client in social media
• The company starts to open its social media doors but the customer is seen mainly as the target of a message. Its role is thus totally passive while communication is always originated by the company
• For the first time in the journey to the Social Business, it is the customer who, through the new power gained by the communities which is a member of, began to push for greater openness, transparency and more precise answers from the company. The organization recognizes a new role to its partners, but any interaction crossing the company’s boarder is mainly framed in the communication or marketing field, without connections to internal processes or to the business.
• The customer is no longer happy to only receive packaged and standard information by the company. He/she claims to be heard, recognized and involved as partner and active agent in improving the service, the evolution of the product, the advocacy of the brand towards his/her peers. The type of people involved (customers, partners, suppliers, etc.) and areas of action, however, remain confined within well-defined collaboration scenarios
• All entities involved in the value chain are recognized and enabled to work with the company in an egalitarian and mutually beneficial relationship. Breaking down the barriers between inside and outside, processes change to enable and capitalize on real-time contributions from the entire ecosystem. The value is no longer built inside the company to be sold to the market, but it becomes the very result of the exchange between all actors involved in a common environment.

Technology (from none to socialized processes)

• There is no use of social tools coordinated by the organization. Some employees are likely already involved in online conversations on a personal basis
• Some departments, even through often poorly coordinated and experimental platforms / channels, launch social interventions aimed to an higher visibility of the brand and the products. There is no integration of online conversations with the systems that enable the company
• The organization adopts social intelligence tools capable to systematically intercept, collect, analyze and extract meaning from conversations regarding the brand. Conversations are disconnected from internal systems and the answers provided by the company will not impact on the processes
• The social intelligence is channeled in a Social CRM strategy to both provide timely 1-to-1 answers to external stakeholders and to support continuous improvement of internal processes. Conversations are stored within the CRM to provides a 360 degree view of all customer interactions and enable sophisticated business intelligence. Thanks to dedicated business rules, insights coming the market are passed to Adaptive Case Management / BPM / PLM systems to ensure the evolution of the product / service. Every decision is taken, stored and reused in an internal community
• All internal and external processes are socialized (i.e improved through participated, emergent and collaborative contributions) dynamically reorienting the company around feedbacks coming from customers, prospects, suppliers and partners. A collaborative layer acts as the glue between separate systems thus ensuring the emergence of valuable individual contributions, regardless of the hierarchy, departments and silos

Conclusions

I think that right now most companies are positioned between Phase 1 (Island) and Phase 2 (Channel), in a state of ignorance, denial or, at most tactical use of social media. The business value is absent or marginal here.

The smartest organizations have however already taken the first steps towards listening and involving customers to improve the business, respectively going through Phase 3 and Phase 4 of the model.Only a few (see for example Procter & Gamble, Dell, Best Buy, Zappos, IBM) have already reached this point, nurturing a new relationship with the ecosystem along one or more externally-facing processes.

Social Business, however, remains a destination for the future. A direction to target, but one that most companies won’t ever be able to reach, if not in a very very long time frame. Exactly on this ground is happening the transition from an industrial society to a post-industrial world where what matters most are not products themselves but knowledge, creativity and the achievement of personal goals.

What’s missing in this model? Do you think the progression is correct? Waiting for your comments.