From traditional business to social business

Posted Oct 8 2012 by in Connected Companies

This is an extract from an article written by Christoph Schmaltz (@christoph), a consultant at Dachis Group and headshift. You can read the full article here.

…From Hierarchy to Network

A traditional business has a rigid top-down communication structure. News from the top is passed down through the ranks of the organisation. The middle management is powerful as it acts as gatekeeper (see above). Open and transparent dialogue between the top and the bottom of the traditional business is difficult if not non-existent. Furthermore, technology provision in traditional businesses have manifested in department silos. Few employees know what other departments or teams are working on. Cross-departmental connections are made in the cafeteria, at the water-cooler or in the smoker’s corner.

Contrary to popular belief hierarchy still exists in a social business but it is heavily supported by an underlying network. Communication flows are bi-directional and cross-departmental. The middle management has lost its power as gatekeeper and is now functioning as platform provider. It provides a platform for the management and employees to communicate and connect. Employees can see what other teams and departments are working on. Increased visibility leads to better decision-making, improved customer service, superior products and ultimately higher sales. At the same time a social business also acknowledges that people connect with people not just because of work but also interests. Therefore, it encourages employees to form communities of interest or purely social groups. This creates stronger bonds between employees which leads to lower turn-over rates. If an employee does leave, they are more likely to stay in touch with colleagues, not the business. Remember, people connect with people, not with companies.