Studying the impact of innovation on business and society

The Time Has Come For Holistic Business Strategy

Guest post by Chris Heuer, Founder/Chairman Social Media Club

What’s the biggest problem in business today?

It’s not access to capital, though that is a real problem in that it inhibits growth in some places where it shouldn’t. No, it’s not command and control management hierarchies, despite the contribution they certainly make. It’s not the problem of “the other” that plagues broad swaths of our society, though that is a close second. I contend the biggest problem is that each business has too few people looking after the whole of the business. This is not only seen in the concentration of power in the hands of the C-Suite and the Board, but also in the org charts that map an often too real silo like operational structure.

What’s the solution? I believe we need to fundamentally rethink the closely held tenets of business strategy, especially in light of the geopolitical and environmental situation we now face. To put it simply, it is time to for organizations large and small to adopt a holistic business strategy that empowers more employees to think about the whole of the business; to more fully understand the ins and outs of the product/service offering; and ultimately focus on serving their markets instead of serving the stock market.

From 2006 until just a few months ago, I had thought that social media would become the big tent where this sort of thinking would take hold and begin to reshape the very way organizations are managed. Now, however, it has become clear that social media, at least in larger organizations has become another silo, albeit an important one.

Further to this point, it seems that social media has bifurcated into two halves; the social side which deals with people issues like support, sales, recruiting and managing the brand’s reputation; and the media side which deals with massive reach, content production and a never ending pursuit for more followers. Much to my chagrin, social media is not the umbrella under which organizations are transforming. Instead it is being relegated to another silo of the disciplines that fall under digital or online marketing – despite the myriad of ways in which it changes all aspects of operations and strategy.

Still, social media is a catalyst for bringing about a massive change in the way that organizations are structured, how they interact with markets and how employees approach the very nature of their work. So I am not giving up on the power of social media, just adapting my world view to how it has actually evolved in its adoption by the mass market.

Over the past few years I resisted this despite watching many forward thinking thought leaders seek new places to hang their hat. Jeff Dachis embraced Social Business, Francois Gossieaux forwarded Human Business and others have sought to simply distance themselves from social media. To a certain extent they were right to do so, but while I agree with many of their principles, posts and perspectives, I have had trouble getting fully on board behind those memes as the next bit thing. To the extent that it describes what needs to happen, I have very much been a supporter around the idea of this time being known as “The Great Restructuring” as advanced by Jeff Jarvis.

Over the holidays, I realized that the reason for my reluctance was that none of these emerging ideas hit upon the most important distinction which should be the focus of our work ahead. Yes, businesses need to be drastically restructured in order to operate as a more social organization, with greater respect for each human within it. But, these core principles alone are not strong enough to transform the very heart of business and the entrenched egoic mindset that has it held hostage. Businesses today also need to think about longer term impacts to the socioeconomic systems over their own short term gains. They need to understand their role in the broader market, rethink how they create value and act as a symbiotic, inter-connected entity within the global ecosystem known as society. These are principles that Michael Porter recently outlined in a brilliant article called Creating Shared Value in a cover story package on Rethinking Capitalism for Harvard Business Review. [Also read this great summary article by Sean Silverthorne on BNet]

In short, this is exactly what I have been thinking about, explained in a much more eloquent way then my writing skills allow. As Michael Porter stated, business should be “creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking.”

Reading his article brought me back to the insights I first unearthed 12 years ago while working for the United States Mint. It has given me new energy that I will use in the year ahead to advance the principles of holistic business strategy with newfound hope for bringing about real change in how organizations are managed, in how employees relate to their employers, and in how we, as a species, go beyond survival, to thrive together. It is ultimately a vision about a form of conscious capitalism, where innovation can still be rewarded, but without exploiting resources or people. Where doing good leads to profit, rather then coming after profit. Where contributing to the collective good brings personal, communal and societal rewards.

This is largely what I have been talking about under the guise of “Serve the Market” [video | slides] over the past year, and what I will be writing about in the year ahead. How do we serve the market? With a holistic business strategy that does not look at any part of our organization, our operations, our partnerships or our products as separate from the rest, or separate from the people who are seeking value from it.

It’s a simple, almost glib phrase, to “serve the market”, to be of service, but it’s game changing. To reach the greatest success in serving the market requires a holistic business strategy. A strategy that understands the business’ place in the overall ecosystem. A strategy that enables more employees to look after the whole of the business rather then their single silo. As with all good transformative ideas, we need a yardstick to measure the success of our efforts.

While the organizational growth vector and profitability are still core metrics, it’s time for us to improve the measurement of the most important currency in the market, that which either lubricates the flow of market transactions or creates sales friction. What we really need to measure is trust. As I first proposed last year when discussing Market Engagement Optimization, its more important then ever for us to develop the Net Trust Score© as the barometer for measuring a business against its competitors and for determining if its investments in areas like social media are paying off.

I first started exploring these ideas when I entered the business world with the interactive agency and local content site I founded in 1994. I was fairly certain that I was on the leading edge of something that would soon become a massive wave in interest by senior management in this seemingly obvious approach to business. Now 17 years later, holistic business strategy hasn’t taken hold or even gotten onto the radar of many management consultants, but with respected management leaders like Michael Porter supporting this vision, that is all about to change.

Now in 2011 and in the years ahead, I hope to be a catalyst for bringing the philosophy of holistic business strategy to a wider audience by creating a space for open dialogue around the assumptions we have made in the design of our systems, in how we approach profitability, in how we think about the long term over the short term and how we ultimately create strategies that serve the market, rather then exploiting it.

I hope that you join me in exploring and refining these ideas… and also questioning them. And I hope to illuminate what it all means through many case studies we can collect together along the way.

Follow Chris Heuer on Twitter

52 COMMENTS ON THIS POST To “The Time Has Come For Holistic Business Strategy”

  1. SAHK have sought to apply conductive education to and embed it within their business model holistically, one might say, if by that we mean, the whole.

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  3. By analyzing and sharing this data, we hope to provide insight to corporations, suppliers and business travelers alike, to help them make more informed decisions, create greater value and drive down costs.

  4. Everett Byrd says:

    To the extent that it describes what needs to happen, I have very much
    been a supporter around the idea of this time being known as “The Great Restructuring” as advanced by Jeff Jarvis.

  5. where innovation can still be rewarded, but without exploiting
    resources or people. Where doing good leads to profit, rather then
    coming after profit. Where contributing to the collective good brings
    personal, communal and societal rewards.

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