Nilofer Merchant claims that traditional strategy is dead. Old strategy organizations didn’t need to exploit the talent and creativity of their members to be competitive. Today is different. Today, in the social era, we need to use social media to engage the hearts and minds of our workforce. With this in mind, we’ll go over Merchant's new rules for creating value.
CONNECTIVITY & CONTRIBUTION
The merchant states that today’s power comes from connectivity. The Social Era is about connecting things, people and ideas. Connections in the way we work with others, and connections through collaborative platforms and joint ventures. Anyone can create and contribute. Merchant’s term for an individual contribution is online. Online is the thing that only one particular individual can bring to a situation. Skills, passions, and purpose. We each have our own experience, good and bad, and we need to use this to our advantage.
In the Social Era, consumers, who traditionally have been considered as extractors of value, are now seen as a source of value creation and competitive advantage. Merchant claims that relationships gain strength from trying new things and learning from failures, creating resilience as a consequence.
Adaptability is also central to how organizations and people thrive in the Social Era. Instead of seeking perfection the first time, we need to be incremental and continuously innovate to deliver the products or services our customers desire. And the customer needs to be involved.
Fundamental to the Social Era is the tenet that organizations are free of hierarchy. Merchant suggests we consider organization structures as concentric circles that change and resize as needed. We play to our strengths and if our strength is not what is needed, we let someone else take over. If you were going to design an organization from scratch today, Merchant suggests that you would build it around flexibility. And because of this, the people involved gain respect and recognition, sharing power and rewards.
Merchant clearl points out that competition has changed. Aside from market-specific competition from below, there is also competition from disruptive organizations that are finding new ways to get work done.
Strategy in the Social Era needs to focus on the general direction and rely on feedback loops with customers to iterate and adjust direction.
Set a course, adjust as needed, and learn until you get it right. Connecting with our customers can provide a way to build resilience; it enables a deeper connection to the community in which we are creating.
Merchant suggests in the Social Era we need Social Purpose. It’s no longer beneficial to look down on customers as inanimate objects. We need to engage with them and show integrity. There are things that we do and things that we care about. And then there is the story we tell about it. When those things are in the full alignment for individuals, we say they have integrity. The same goes for a business in the Social Era
So with all this in mind, are traditional strategy businesses doomed? Not quite. Like Darwin’s Theory, the business that adapts the fastest to environmental changes will do better. And who doesn’t want their business to evolve?