Month: October 2010

CRM vs. Social CRM – The reason why we need “Social CRM” terminology

This post captures my response to a question posted by Jeremiah Owyang in the Social CRM Pioneer Discussion Group.

His question was: What is the upside and downside of SCRM branding?

My answer follows.

Social CRM is CRM (I think that has already been settled). The differentiated terminology reflects the significant changes in the business environment and CRM evolution in response to them. Until that evolution consolidates, “Social CRM” is the future of CRM.

It is natural that incumbents stick to “CRM” and new entrants highlight the differences by calling themselves “Social”.

For how long we will continue to discuss terminology will depend on how successful the new entrants are carving a position in the CRM market. Will the “SCRM vendors” be able to maintain  momentum through the inevitable disillusionment that follows the Social-anything hype?

If those vendors can capture a significant portion of the market in the next couple of years, the CRM/SCRM differentiation will survive for a long time. If they don’t, then SCRM blends back into CRM.

Electric cars are cars. If Tesla survives and grows independently, they will continue to represent the “electric car” (even if GM sells more electrics than them). If the big car makers swallow the small ones, electric cars will just be “cars” very soon.

So for new entrants, the advantage of associating themselves to ”Social CRM” is to highlight the differences.I don’t think that
creates the expectation by business users of delivery of a revolution (that demand only exist among  us, searching for a formal definition of the difference).

At Coffee Bean Technology we have had that discussion and, as it is obvious, we decided to position as something different from Classical CRM. So Social CRM we are. There are benefits and risks in that choice.

Evolution happen when we focus on what is new and to draw that focus new terminology is needed. That doesn’t mean the status quo is not important. It is just not interesting.

Being Strategic means considering whether our current actions move us towards a desired scenario in the future.

I have led corporate strategy for a large company and have always though strange that a 2000-people organization would dedicate 6 people to strategy. Does that mean the other 1994 are not?

Unfortunately, it does.

The CEO says: strategy is very important, but…. we really need to close this quarter, so would like us to focus on delivering the results we need.

Because the cost of communication through the hierarchical layers and collaboration across functional silos is very high, it is more efficient to break the vision into smaller partial goals and ask people to ignore vision and focus on partial metrics of performance.

Because the data workflows are serial and the measurement and analytical methods are primitive, the strategic loop has a long time lag and vision and strategies can only be revised in the long-term (typically in intervals of 6 months or a year).

Strategy is about making decisions that are thoughtful and deliberate, based on the vision of desired results. Strategy is not meant to be inefficient or long-term. The classical business model imposes that.

Adoption of social computing technologies promise to reduce the cost of communication/collaboration and deliver analytical data in real-time to people making decisions at any level.

Social Computing technologies can shorten the strategic loop, break the information silos and let everyone make decisions with visibility.

Being strategic every day keeps the doctor away.

Functional Departments are like Social Networks, Projects are like Communities

Events such the Haiti Earthquake or the Chilean miners rescue have the power to bring people from around the world together to collaborate on a common goal. That happens quickly and without central coordination when all undertand unequivocally what the priorities are.

“People from all walks of life that seem to have no relationship at all, held together by a common interest.” That is exactly how Dr. Michael Wu defines Social Communities.

Still according to Dr. Wu, in a Social Network, on the other hand, “people are held together by pre-established interpersonal relationships, such as kinship, friendship, classmates, colleagues, business partners, etc”.

In real-life social environments, people move from one community to another as their interests change over time. They belong to multiple communities at the same time as every human being is multi-dimensional and has multiple interests to share with different groups.

As we think about implementing Social Business models, it makes sense to map and relate current corporate organizations into social organizations.

• In corporate structures, Functional Departments are like Corporate Networks of employees  held together by pre-established common set of skills and domain knowledge, organized in a relatively fixed and unequivocal hierarchical management structure.

• When people from different  functional areas are brought together into a Project (say, design, develop, market and sell a specific product), they form something like a Corporate Community collaborating towards a common interest and pursuing a common goal.

In a Classical Company we organize primarily along Corporate Networks of professionals grouped by domain knowledge. By using classical planning strategies of decomposition of the mission into objectives aligned to the organizational lines, we hope to maximize efficiency by leveraging specialization and minimizing the need for inter-area collaboration to get the job done.

But, as competitive pressures increase, innovation accelerates, and information spreads faster,  companies are required to respond in real-time, the classical strategic planning process modeled after functional or managerial networks falls apart and communities become the most effective model of primary corporate organization.

Social Business seeks to make the classical corporate structures more flexible and fluid so that they can better leverage collaboration. To embrace Social Business, corporations will have to adapt their structure (less hierarchical, fluid organization charts), attitude (let information flow, empower and react in real-time), and process (more reliance on collaboration, less on linear workflows).

Embracing Social Business is prioritizing Communities over Networks. It is a move from tactical discipline  towards real-time response. It is deciding what is important and then organizing to do it (like in the international rescue effort in Chile) instead of organizing first and then define what is the goal of each party (like in classical business or regular diplomatic circles).