Big Idea: Social Business

Social Business: Flat or Hierarchical? A Surprising Answer

The most effective social businesses may start to look more like organizations that long predate modern corporations — so-called “loosely coupled” organizations such as military, education and religious institutions.

Gerald C. (Jerry) Kane Reading Time: 4 min 

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Social Business

Social business research and more recent thought leadership explore the challenges and opportunities presented by social media.
More in this series
Social Media Birds Hierarchy of Roles
Businesses most adept at using social media don’t have a strict hierarchy of roles. Instead, they push decision-making capabilities down to people who can better deal with conditions on the ground.

Social media represents an enormous opportunity for most organizations, particularly knowledge-intensive ones. While marketing applications of social media are getting the most attention today, the greater impact may come from applications internal to the organization. The McKinsey Global Institute, for instance, estimates that social media is poised to unlock $1.3 trillion of economic value, mostly through the improved efficiency of knowledge workers.

Despite this considerable potential, I suspect that most organizations will have significant difficulties leveraging social media for internal collaboration. This suspicion is borne out by Gartner research, which touts a very high failure percentage for internal initiatives.

The reason: strategy is too often stuck at the executive level.

After reading my recent post, “Procedural vs. Strategic Approaches to Social Media,” one reader, Susan Deisenroth, pointed out that part of the reason that digital teams do not act strategically is that they are not permitted to do so by their companies. She noted that many organizations’ strategy is locked up in the Board Room and the C-suite, with the average employee unaware of — or unable to act on — the bigger strategic vision.

She is right, of course. Traditional bureaucratic mechanisms are too slow to handle the pace of collaboration in social business. A recent Harvard Business Review article noted that one Fortune 200 company took a week to generate and approve an 140-character tweet in response to a critic online — far too long to possibly be effective in the fast moving world of social media. Even if employees can collaborate more efficiently and effectively using social media tools, any impact will be minimal if they still need to navigate the old bureaucratic processes to leverage the results.

Similarly, managers who use traditional mechanisms to oversee their newly efficient employees will drown in the information and activity generated by these subordinates unless they also embrace social media themselves. Tools such as blogs and online video can allow top executives to communicate with managers globally as well as solicit feedback from those managers. The vast amounts of data generated by social media tools can provide unprecedented transparency regarding organizational processes through sophisticated analysis and visualization.

Topics

Social Business

Social business research and more recent thought leadership explore the challenges and opportunities presented by social media.
More in this series

About the Author

Gerald C. (Jerry) Kane is an associate professor of information systems at the Carroll School of Management at Boston College. He has been researching and teaching social media and social networks since 2005. He can be reached at gerald.kane@bc.edu and on Twitter at @profkane.

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Comments (4)
Shalin Siriwardhana
Well for this I have a simple answer. If you are a startup company (especially in the tech industry), flat structure is the best. If it is a family own business the most suitable structure would be hierarchy. the reason for my answer is the responsibility distribution structure.   Flat structure is a distribution among the same level while while hierarchy has different level. These examples from the Creately Org Chart Software proves my point
Michael Cata
The article alluded to this practice, but spelling it out:  pairing social media analytics with a workforce optimization component could help organizations create teams in a dynamic environment.  Another neat extension of this logic would be organizing teams around value creation centers rather than purely functional units as seen in today's institutions.  To give an example - the US Special Forces deploys small teams - a medic, a gunner, a sniper, an air capabilities expert, etc. - to respond to issues/crises in real time.  Applying this example to industry, you could imagine a team, with members from marketing, logistics, finance and IT working together to solve a problem.  On a macro level this decentralizes tactical AND strategic decisions to the field.  Decisions are made with a broad range of perspectives - holistic strategy creation and implementation - rather than a single, large, and slow functional unit creating policy and then passing it onto the next.
See Beldner
Social business isn't just about leaders being able to effectively execute their vision and strategy. It's also about employees being able to influence that vision and strategy. 

When I think of institutions that enable bottom-up change, military, education and religious institutions generally don't make the list. Advocating for substantive change - challenging the dogma - in these environments often requires breaking-off and going your own way.

Encouraging organizations to be more dogmatic - to have more of the stuff that enables people to work in a deeply hierarchical yet decentralized institution - would tie an organization's hands when real change is needed.
Jamie Notter
Amen! In Humanize we talk about decentralization--not just in the raw, flattening sense, but in the ability to experiment and learn, in providing enough clarity on how the enterprise works to actually enable real ownership behavior. And yes, the military can be a great role model. It's one reason why they invest so much in their version of "new employee orientation" (bootcamp). They need their "employees" to deeply understand the organization, because when the bullets fly, you don't have an opportunity to check the manual, or even ask your boss (or your colleagues). You have to act. The military may have invented "command and control," but they're more decentralized than most people think.