On the Evolution of “Social Business”

When Andy McAfee coined “Enterprise 2.0” in 2006, he deliberately avoided using the term social to describe the new ways digital technologies were helping organizations collaborate and communicate.

Why?

In part, executives tended to associate the term “social” with water coolers, parties — and more generally, employee idleness.

Despite his reluctance, many writers and managers now use the term social business to refer to what McAfee described as Enterprise 2.0 activities and organizations. We don’t hear the term “Enterprise 2.0” so much nowadays. Even the modifier “2.0” has lost cachet. The world, as it tends to do, has moved on.

Today, the term “social business” may be losing, if not its prestige, then possibly its coherence. For one thing, it used to be easy to describe the concept of social business that the MIT SMR Big Ideas initiative addresses by contrasting it with the way Nobel prize winner Muhammad Yunus uses the term in his 2009 book, Creating a World without Poverty — Social Business and the Future of Capitalism.

Back then, when recruiting academics to participate in our research, some hadn’t heard of social business or would ask what exactly we mean by this phrase. In response, I would say that Yunus uses the term social business to describe organizations that directly pursue important societal or ethical or environmental ends, whereas our work with social business focuses on new forms of collaboration and communication that companies are developing with social media. [I do adjust how I describe our work at MIT SMR based on the audience.] Usually, that distinction helps people understand what our research focus is. Even when that contrast didn’t clarify what our social business research is about, most understood what it isn’t about.

However, the emergence of companies in what has come to be known as the sharing economy, the Zipcars and airbnbs, is making it more difficult to maintain that contrast. These companies tend to have business models that rely on people collaborating, sharing or buying a wide range of stuff. Airbnb, for instance, enables people to rent rooms in their house or apartments to other people, creating a travel industry segment that bypasses traditional hostels, bed and breakfasts, and motel and hotel chains. Airbnb has more rooms to rent than the inventory of many hotel chains.