Categories: Media issues / PR issues
28 February 2012
Limits to digital networked PR and business
There has been lots of talk in PR circles about value networks and the networked society. Here I take a closer look at what the fuss is all about and issue a note of caution and a call to moderate the hype.
Utopian PRs have been dreaming about “one world, people and planet” in which all the barriers between various publics come tumbling down. They envisage a connected world in which the lines of demarcation between internal, boundary and external stakeholders dissolve as they connect transparently and interactively in a value chain that links interdependent companies to their consumers and markets.
But such views ignore some major issues.
One is that in an open digitally-connected world, there’s more need than ever to conspire – organise, ghettoise, corral – to keep things confidential and hidden behind closed walls.
Indeed, we will see the kind of problem which Freedom of Information rules can produce: a clever, covert, closed decision making in which everything which really matters is centripetally driven to a cabal. (Remember the government of Tony Blair?)
Arguably, the more open things become and the more control bosses relinquish to networks, the more restrictions they will have to impose on those who operate in them. This might, paradoxically, lead to even tighter control on commercially sensitive information than exists today. It might lead corporates to adopt a civil service mantra of only releasing information on a need to know basis.
Another issue that the utopian PR camp ignores is competition. Companies forging various so-called value networks are as likely as not to form lots of them. They are as likely as not to value some more than others and to find themselves involved in contradictory and conflicting chains.
This will lead to lots of tension and uncertainty within corporates and institutions, such as government service providers, as they are forced to choose between their various product ranges, service offerings and partnership relationships, according to either their broader interests or their ability to sustain them. The resolution of such problems, or issues, will remain driven from the centre, from the top, by corporate or institutional bosses concerned with strategy.
Moreover, because of competition, PRs at either end of a chain, not to mention the middle, might find themselves pulling in different directions and unable to always align their interests, messages and narratives. There is no reason to believe that just because we introduce new tools into the workplace that real-world tensions, politics and commercial interests, will evaporate. We should, I warn, avoid the technological determinism trap.
My point is that we should not think that corporations are about to relinquish control to horizontal or flat digital networks. We should not kid ourselves that top-down management and communication are about to die out. Neither should we imagine, as the PR utopians do, that existing internal silos, lines of responsibility and accountability, will be or should be altered very much by commercial Web 2.0 and 3.0 applications.
Here’s what Norman Lewis, Managing Partner at Open Knowledge UK, had to say on this when he commented on my piece There’s no social media revolution:
… it’s definitely the case that social media like any other technology does not alter the realities of the business world. (I very much like your points about the chaos that would ensue in a company if everyone could relate to sales, customers etc). This is based upon the naive hippie prejudice that enterprises can become democracies run in the interests of employees empowered to act like free agents.
Another of the problems that’s being overlooked by utopian PRs is how social media usage in the personal sphere is maturing. They seem to have missed the point that the major stumbling block for social media of all kinds is privacy, trust and control over personal data. It would seem that social media users are emerging from the immature days of the early adoption period and starting to ask tough questions.
In the commercial sphere the risks and drawbacks have been fairly clear from the very beginning.
There is no doubt that knowledge-sharing, collaboration and instant feedback and decision-making all have great appeal. There is also no doubting that patents, IP, confidential information and in-house knowledge lie at the heart of commercial value. It is also obvious, or should be, that for legitimate reasons such as their survival, corporates are going to be reluctant to dilute and devalue their brand value and identity in an undifferentiated network. So the open Web 2.0 information flows between various players presents itself both as an opportunity and as a risk.
Yet there’s even more reason for PRs not to get over-excited about Web 2.0’s ability to transform the workplace as utopian PRs do when they talk about paradigm shifts. Some believe that Michael Porter’s value chain model has already been replaced – or almost so – “by fuzzy (and not linear) and immaterial (rather than material) networks that normally disintegrate the distinction between internal and external publics.” But the truth is that Web 2.0’s commercial applicability is in its infancy and has yet to make a great impact.
The point the utopians miss is how much experimentation will be required to ascertain where and how to make Web 2.0 and social media applications work best in the corporate and public sector domain given the virtual impossibility of measuring their benefits accurately.
Don’t get me wrong, however. I favour innovation and risk. I decry our current risk-adverse culture. I look forward to seeing more Web 2.0 and 3.0 applications introduced by business and institutions to deliver products and services. I don’t doubt for a moment that they can boost productivity and add great value.
I also accept fully that Web 2.0 and 3.0 provide a new sense of power and control to consumers and poses new challenges to corporates. So of course corporates need to manage this threat and turn it into an opportunity. But that aspect of the story was not what this post was about.
Note: This first appeared here in May 2010.
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Very provocative and well thought out post Paul.
I broadly agree with much of what you say in this post. Where you are particularly correct is in stressing the tension between the latent possibility of social media inside the corporation and the top-down culture of how corporations actually run. However, this is a dynamic relationship, not one set in stone (as much as C+ executives think or desire it to be so). This tension will be a source of conflict and ultimately of change in the future. Why? Because younger employees who have grown up with this technology at their fingertips (and who consequently do not think of it as ‘technology’ but the way the world works) will kick back and find ways around internal rigidities that get in the way of being effective. Moreover, for some senior managers (many of whom we consult with today) the potential of this convergence of behaviour and technology is too big an opportunity to let slip. The possibility of visualising the informal networks underpinning how corporations function, as a means of making this more effective, represents an opportunity to leverage social capital in ways that few could have imagined a decade ago. All the failures of the past, from knowledge management solutions to top-down intranets, can be replaced with highly effective structures that incentivise people through recognition and effectiveness (job satisfaction). Here the real potential of Enterprise 2.0: namely, the socialising of standard business processes is in its infancy.
But where I think you underestimate PR and social media is in the shift this represents with regard to consumers, users, customers and corporations. This is not the beat the naive ‘democratisation’ drum but to recognise that the consumer/producer relationship has been altered by the power of individual communications now in the hands of the ‘great unwashed’. Social networks, initially the outcome of digital children’s need for self-expression, acknowledgement, entertainment and experimentation, has now become part and parcel of a mass consumer participatory culture. No, I am not saying user generated content rules. The broadcast paradigm – through advertising or secure media channels, newspapers and press releases – is now challenged by more diffuse individualised channels – Facebook, Twitter, LinkedIn, etc. In short, the corporation no longer has a monopoly over the truth (their brands). This has led many social media gurus to insist on new metaphors, particularly the notion of a need to engage in a conversation with customers. For many companies concerned about PR this is seen as a threat, whereas it can be an opportunity.
I say ‘can be’ because unlike many social media evangelists, power has not been lost by the corporation. The nature of that power, or more precisely, the exercise of that power has shifted. I am not a believer in the notion that social media places power in the hands of consumers. If you analyse Twitter and many media sharing sites you will discover that most of the chatter and content is actually generated in the mainstream media and is then filtered by the masses. The key point is this filtering through social media channels. The opportunity is to be able to monitor these channels in order to gain insights into the brand experiences of your customers for two reasons: first, to be able to intervene and turn brand hater into brand ambassadors as Dell have demonstrated so successfully; and, second, to bring those insights back into the corporation so they inform communications, product development and ultimately, innovation. This is what we (as a company) call Social CRM – the ability to influence internal processes in response to customer experiences.
In short, the real potential of social media is the opportunity it offers corporations to reorganise their internal processes such that they more adequately reflect the needs of their customers. Enterprise 2.0 is really about cultural and organisational renewal. The old computer science adage of ‘crap in, crap out’ holds doubly in this brave new world: it doesn’t matter how good your PR might be, if what you are selling is crap, it will be crap. Get it right on the inside and the hearts and minds of your customers (and competitors) will follow.
Norman, that’s a very useful comment, thanks. I endorse fully your optimistic take on SM’s current and potential benefits. I certainly agree with you that SM should be embraced more than it currently is by corporates and public institutions. I fully accept, never doubted, actually, that SM will be ground-moving in terms of framing the customer experience; what your company usefully calls Social CRM. My challenge so far has been how to cut through a tsunami of the PR hype and nonsense – which undermines our credibility – without at the same time becoming one-sided myself. In that regard, I think you have just helped me, and hopefully other PRs, discuss and present such matters better in the future.
Paul (and Norman) quiet the fascinating discussion. Earlier this week on my blog, I mentioned two pieces of research that either shed light or darkness onto employee motivations, particularly during times of great change. (http://bit.ly/aMu49s on need for managers to talk to their employees, and http://bit.ly/cF9V2l on employee silence being driven more by futility than fear).
Norman is entirely right that Millennial employees (and some younger Generation X) simply have never known a time without the tools of social media. Their expectations are very high, and many of their employment decisions will be governed by vastly different motivations than the prior generations.
There’s no doubt in my mind that enterprise risk is manifestly higher as a consequence of these tools. At least at this point. If one of the hallmarks of Excellent public relations is control mutuality, the willingness of publics (or stakeholders) to express that mutuality is more likely in organizations which embrace social tools than among those which do not. What remains to be seen (and is a research interest of my own) is whether there’s a differentiated level of performance as a result. That performance difference doesn’t have to be revenue or stock price; it can be a decrease in operational risk or turnover, or an increase in employee positive attitudes (that should lead to revenue), etc.
The last of the old school, top-down commanders are retiring soon, to be replaced by skeptical, impatient Generation Xers, with 30-year old Millennial leaders close behind. They, by the way, are the largest generation since the Boomers. Just sayin’.