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In the digital age, experiments are more popular than plans.
Leaders are expected to manage increasingly complex operating environments where tomorrow’s challenges are inevitably different to those they face today. Practitioners are called to set and re-set models, processes and systems as digital technologies influence business practices across all functional lines. And the thought of industry disruption leaves most incumbents with nails chewed and heads between knees.
With the success of a business now so dependent on its response to change, real accountability has been devalued: it’s hard to plan and be responsible for anything when everything is unpredictable. Particularly when social and digital platforms evolve too fast for organisations to properly invest in and utilise them.
As Stefan Erschwendner puts it: “The significant reduction of entry barriers for experimentation…further increase the tendency to experiment rather than plan.” Industry just gets on and tests things without really planning for success.
Social is everyone’s favourite experiment.
There’s no aspect of business more ripe for experimentation than social. And I can understand why.
With everything changing so fast, it’s easier to focus on simply getting things up and out on social media. There’s little accountability when social is thought of only as a series of channels there to be tested. It’s likewise low risk if social is just another medium for tactical extension of existing campaigns. When the social world moves this fast, past mistakes can often be quickly forgotten.
And while industry continues to celebrate campaigns that win awards over those that create lasting value, organisations will continue to direct investment in social towards experiments and away from strategic decisions. These sorts of conditions provide a wonderful breeding ground for experimentation with strategy merely an afterthought.
So, what’s the problem with social experiments? Commercially, you’re likely wasting your time.
But when it comes to social, are organisations backing themselves into a corner by viewing it as an environment for test-and-learn (and sometimes without the ‘learn’ component)? Are organisations preventing real, sustainable opportunities to improve business performance by committing social investments to trials over strategy?
A recent Gartner survey of CMOs revealed most annual marketing budgets sit at around 11% of company revenue, with social media spend comprising around 12% of that budget (CMO Survey). As such, a business with revenues of $100 million spends over $1.3 million on social media marketing.
Yet, in 2016 – more than a decade since Facebook graced the global marketing stage – 88% of marketers still don’t know how to measure their return on investment for social media activities. It’s not surprising social ROI is still hard to quantify when success metrics largely exist in a ‘trial and error’ environment.
When it comes to social, business leaders have been pre-conditioned to believe it’s a testing ground that presents few ongoing strategic opportunities, limited alignment with existing business practices, and considerable risk when given too much attention. Let alone the challenges it presents around measurement.
Sure, leaders might observe the occasional win from a brand perspective, but rarely has social been positioned as an avenue through which modern businesses can identify, manage and adapt to such immense industrial change. So why would they invest seriously?
Social capabilities provide the capacity to think strategically in a changing world.
Social media channels will never provide organisations with the means to think and respond strategically in this environment. But social capabilities can. Social capabilities equip organisations to perform more effectively by looking at the ‘social opportunity’ in a different way.
Rather than focus on the channels popularised over the past decade, social capabilities empower internal teams with the data, technology and knowledge of customer behaviours that underpin social to improve the way organisations market, serve and sell. They ensure social initiatives connect business goals and business strategy with business outcomes, providing a much more tangible return on investment for senior leaders.
Through social capabilities, executives can determine how much value social initiatives contribute to overarching organisational goals, and managers only commit time and resources to those initiatives that generate improved business performance.
Do your leaders view social as a capability, channel or tactic?
The important question to consider is where your organisation sits. Does your CEO or leadership team have the view of social as a tactical tool built over years of seeing social media campaigns executed this way? Or do they believe social is a channel, used simply as a new medium for marketing or service interactions?
It’s less likely your CEO or leadership team considers social as a series of capabilities that will allow your organisation to thrive in this dynamic environment. But could they?
Today’s business leaders all operate in a dynamic, disrupted world. Your opportunity is to demonstrate ‘social’ is not just a group of channels built for trial and error, but rather a suite of strategic capabilities that will allow those leaders to build more responsive, effective and competitive organisations in this time of change.
With the right approach, social is a means to access valuable real-time customer intelligence, inform customer-led product and service development, and identify, segment and target new prospective customers to make marketing more efficient. The business case is clear.