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How Social Technology Is Remaking Business, Branding And Customers

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As a new Forbes.com contributor I am excited and appreciative to add my voice to the other contributors whose thinking is of value to business executives, managers, and investors.

The focus of my column will be the impact of social media on business, and in particular, why companies now need to build their bottom line profits through community-building strategies that leverage social technologies. This will include the way executives must rethink their leadership roles, employee engagement, customer service, and even how to relate to vendors and suppliers.

There is a fundamental shift that social media necessitates in business today – the need to transition from “Me First” to “We First” thinking. For decades Me First thinking and behavior has dominated how we have conducted business, treated the environment, and how consumers and brands have interacted. Despite decades of short-term profits, the long-term consequences of this approach have been catastrophic. They include the economic meltdown of 2008, the global recession, and the persistent economic problems that plague countries and societies around the world today. As a result, there is a growing awareness that we must begin shifting business towards a more collective and socially responsible mentality in which companies and consumers think about building a better world as much as they think about profits. Given this, the question is, how can brands move towards this responsible and collective mentality? The answer is, by adopting We First thinking.

Let’s look at what We First means to leadership. Ever since Adam Smith enunciated those quasi-sacred words “the invisible hand of the market,” corporate executives have discharged their responsibility almost exclusively to their shareholders. It didn’t matter that in the name of maximizing profits, their companies could pollute the air and water, or take unethical shortcuts, or outsource so many jobs to lower-wage countries that we are left with too many unemployed people in our own communities. But the cumulative effects of that leadership thinking are now clear. This Me First profit mentality has harmed the planet and created a global economic morass that continues to get worse.

What today’s business reality makes clear is that brands cannot survive in a society that is failing economically, socially, ethically, and morally. Corporate executives need to re-frame their responsibilities to include the interests of all the stakeholders in society at large; not just shareholders, but also employees, the citizens of our communities, and those who care about the environment. This new orientation for leaders demands that corporate CEOs and executives become more visible and engaged in their interactions with stakeholders of all types. This is one of the most overlooked advantages of social media and its potential for leaders. Social technology gives leaders a vital new platform with which to connect their companies to the myriad stakeholders who have an interest in their well being.

When it comes to employees, some might argue that corporations have always taken a We First approach by providing people with good jobs and salaries. This may have been true in the 1950s and 1960s, but since the 1970s, we have seen the minimization of labor unions, the loss of the loyalty contract for professions, and the rise of outsourcing. The interests of the masses of employees have been subjugated to profits for shareholders and bonuses and rewards for senior executives.

The pendulum is swinging back, however, towards a new empowerment for employees—thanks again to social media. Through their conversations and desire for a better world, employees now expect companies to play a meaningful role in their lives by bringing the core values of that company to life in ways that allow them to participate. This has serious implications for companies. To attract the best and brightest workers of today’s world, they now need to offer more equitable rewards, a higher commitment to social responsibility, and a value system that honors building a better world. The rewards for giving employees what they want in this regard are many, including the fact that your dedicated employees become your first line of advertising because they know personally what your company stands for and are proud to promote it.

When it comes to your customers, the advent of social media has also had a major impact on consumer engagement. Through tools like Facebook, Twitter, Google+ and YouTube, and others, customers now have a platform through which they can produce, distribute or curate content about a company. That content may be positive—or it may be highly negative, enough to harm your company’s reputation for months if not years. These new consumer platforms are leading to a shift in power, away from companies monopolizing their interactions with customers who instead are now gaining an equal balance, if not the upper hand. This shift necessitates a corresponding evolution away from the one-sided “monologue” marketing approach that has held sway for decades, moving to more of a interactive dialogue with one’s customers. In fact, consumers today play a critical role in the reputation of a brand because they are actively engaged in real time with the brand and armed with tools to celebrate or admonish a company among their friends, family, and community.

The wisest companies see this new consumer power as an opportunity to use customer service to drive their reputation, such as by going the extra mile to win over a customer because they know that a satisfied consumer is likely to tell others about their experience using social media. Unfortunately, those companies less convinced about this still see it as an unnecessary burden—but they run the risk of losing market share to competitors who are taking a more active role in social media with their customers.

Finally, let’s look at the how social media has been impacting marketing. Beyond the reasons cited above, social media introduces another new dynamic that directly impacts how brands market in that today’s consumers want to co-author the stories that companies tell. Through YouTube videos, Facebook fan pages, twitterstreams and myriad other tools, consumers are eager to contribute to a brand’s image and its meaning to them. What this demands of a brand is an outright re-framing of its role – it must move from being the celebrity of a community to being its chief celebrant. For companies that are willing to let go and share their brand’s image, the upside is potentially enormous when you consider how social media enables customers to amplify a brand’s message, promote a new product or service, or direct attention towards a marketing campaign.

In future blogs, my goal will be to provide not just guidelines about new thinking, but also practical and actionable examples of how some of the smartest brands are taking advantage of these new opportunities in the social business marketplace to build their profits, while at the same time having a positive impact on the world. These changes in thinking and behavior are critical not just because every company must stay abreast of the marketplace in the face of new technology, but also because this is now what consumers demand. One only need to look at the 2011 Edelman Trust Barometer Report, which states that 86% of global consumers today expect companies to place society’s needs on the same level as their company’s needs.

All in all, social media is driving a new social business world with new rules, new business models and new profit centers. Now is the time for CEOs, executives, managers, and shareholders to begin recognizing that social technologies are not just here to stay, but here to completely remake how and why we do business.