Tonight I got involved in a great online discussion with Derek Overbey, Jeff Turner and Matthew Shadbolt about whether “social” levels the playing field between large organizations and small organizations. In other words, does social media make it easier for small business to compete with large business?
In our twitter conversation, one of the common phrases was “All things being equal XXXX will win.” Usually XXXX was size but speed and smarts (intelligent online endeavors) were also brought up. For example, “All things being equal, the bigger org will win.” Eventually, we end up with a roshambo hierarchy to determine which resource is most important.
There are three problems with this entire line of thought (and Jeff’s smiley in his tweet lets you know we’re all only too aware of them).
- “All things being equal” is not compatible with the existence of a bigger organization–creating what I like to refer to as the “Calling a dog a dirty name and hanging it” fallacy of hypothetical arguments.
- One can have too much of something. For example, one can be too big or too fast or too smart or even too social.
- A clearer understanding of “win” is required.
This, of course, is the perfect set up for the consultant’s answer to everything: It depends.
Whether or not social helps small business compete with big box stores will depend on strategy. Let’s dig in a little, in the spirit of the great conversations I have with these guys.
“Winning” and strategy for online endeavors
The first two issues are intriguing to explore, but the third–understanding what “win” means–is what I think we should tackle first.
I’m going to stick my neck out and drop a definition here (it’s my first time putting this one down in public so feel free to beat me about the head and ears if it doesn’t work):
- The art and science of maintaining and deploying resources in order to have the freedom and flexibility to continue operations.
There are a few things to unpack in this definition of strategy and since I’ve come this far I may as well unpack them.
- Strategy is an art because it involves personal choices.
- Strategy is a science because there are often visible and repeatable results.
- Maintaining resources is about conservation and growing.
- Deploying resources is about spending and taking action.
- Freedom is your ability to execute your plans at will.
- Flexibility is your ability to respond, react and pivot when required.
- Winning means to continue operations.
So that’s the root theory of strategy that I follow, as much as a bullet list will allow anyway. For the purpose of our “Large Business vs Small Business and the use of Social” conversation, the most important part is what I see as “winning.” It’s merely the ability to continue to operate.
So how does “social” fit into online strategy?
“Social” is just another resource. An organization can maintain their social resource and they can deploy their social resource.
Some organizations will have more social resources and other organizations will have less. Some organizations will be better at deploying social resources and other organizations will be better at maintaining social resources.
I believe that the amount of social resource available is not directly related to size. A small organization can have a tremendous social resource.
However, a given that social resources are pretty tightly tied to individuals, a large organization with more individuals in it might have a greater chance of having the most or the best social resources. But it’s just a chance really.
Putting a priority on social doesn’t require size. A small organization can put a priority on social. A single individual in a large organization can put a priority on social. And entire organization can put a priority social. Size, it seems, doesn’t matter.
Size, social, speed, smarts–these are all resources. And they’re independent resources. Big size does not mean slow. Small size does not mean fast. There is nothing inherently social about small business. There is nothing inherently slow about large business. It just depends on leadership and esprit de corps within the organization.
What determines whether an organization wins–whether they can continue to operate–is whether these resources are used to advantage.
Social isn’t a strategy. It’s a resource.
“Being social” or “using social media” are typical descriptions of how people will enhance (conserve/maintain/grow) their existing social resource. But the socialness isn’t the strategy. The strategy is just making sure there are enough resources available to continue operating.
There are many ways to increase the presence of social resources in an organization. You can hire talent that possesses social resources or train existing talent in methods that increase social capability, for example.
The ability to do these things still requires putting a priority on social, which doesn’t require size. It’s the art of strategy.
If you believe that having a social business is going to increase your freedom and flexibility to continue operations, then it’s in your best interest to develop your social resource regardless of the size of your organization.
That’s nice. Can the social resource counterbalance the size resource in a competitive environment?
I believe that social can counterbalance size in a competitive environment.
An example of an end-game in this could be the situation of Borders declaring bankruptcy while there are a great many independent bookstores which continue to operate.
Without the benefit of real data, I’m going to wager that the independent bookstores have a greater social resource than Borders. Borders certainly has size and scale to its advantage (or perhaps, in a world of shrinking paper-media sales, disadvantage). Either way, Chapter 11 is a key performance indicator that heralds significant decrease in freedom as well as a red flag regarding ability to continue operations.
From a strategy perspective, competition for resources was most likely indirect–Borders and independent bookstores were not in direct competition for social resources. The social capabilities of independent bookstores probably wasn’t the deciding factor in Borders declaring bankruptcy.
More likely Borders was unable to pivot in a changing marketplace and effectively use their size to their advantage. This could be a case of having too much of a resource or inability to pivot.
Simultaneously, independent bookstores’ small size may be a default advantage in a shrinking marketplace for paper-media. Whatever inefficiencies and large margins were likely beaten out of them in the first round of online book sales.
The remaining small bookstores are probably as efficient as they can be while still continuing to operate. And by efficient here I mean that the percentage of the small bookstore organization that connects directly with their customers. Connecting directly with customers is a way of increasing social resources.
Small bookstores have become increasingly social in their approach perhaps by default–all non-social resources have been bled away. This is social as survival mechanism.
The social connection customers have with their independent book stores allows for continued operations in the face of a shrinking marketplace. Unable to compete with online bookstores on price, small bookstores compete on social.
Will social always win the day for small business vs large business?
No. Social is just a resource. Different situations, organizations and types of operations that need continuing will require different resources.
Continuing our bookstore example, the continued demise of paper-media may wipe out the independent bookstore just as it did Borders. As the tide of the paper-media market goes out to sea the big boats got beached first but the little boats will surely get beached as well. Social might not be enough to save the independent bookstore.
A different resource focus may be needed to survive the changing marketplace. Instead of focusing on the freedom to continue buying and selling paper media, independent bookstores might need to focus on the flexibility to develop new markets or operations.
How’s that for an “it depends” answer?