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Enterprise social networking platforms: Think Amazon, not Facebook

“This is just Facebook for the Enterprise” is the most common way most people describe enterprise social networking platforms. After all, the look and feel of those platforms borrow a lot from the Facebook interface: status updates, @mentioning, groups, walls, profile pictures, direct messages, and so on. However, when implementing a social networking platform at your workplace, you’ll soon find that the resemblance with Facebook pretty much stops there: even though the building blocks are very similar, the overall playbook is very different. If you are trying to find a reference to guide you through the journey of making your enterprise social networking successful, consider going back in the timeline 10 years before Facebook, and set your eyes on another Internet titan: I kid you not: even though Amazon predated the whole Web 2.0 and online social networking concepts, their evolution from an online bookstore to become the world’s largest online retailer is a much better model for enterprise social platforms to follow. Read on to understand why.

In its essence, Facebook plays an eyeball game: get as many users as you can, make them visit your site often, give them reasons for each visit to last longer, and at the end of the day those volumes will drive ad revenues. So its success is dependent on volumes of users and views, but not direct revenue coming from those users. Having Facebook’s volume metrics as your measuring stick for success within the enterprise makes no sense at all: if all your employees are spending their whole working hours within your social platform, you’ll get lots of page views, lots of user adoption and will likely be out of business very soon. Enterprise social networks need critical mass, but their ultimate measure of success is not how many users they have or how often they visit or how long they stay each time. (Photo credit: soumit)

dOf course, you need to generate enough traffic and usage to support your other objectives, but traffic and usage are not what you are trying to accomplish. The reason you are implementing an internal social business platform is to improve internal communications, collaboration, engagement and the flow of information from where it is created to where it is needed.

A long time ago, telephone and email were the tools introduced at the workplace to achieve the same objectives. How crazy would it be to measure the success of telephone or email at your organization based on the number of calls or messages you receive per day? Never receiving any calls or emails probably suggests a failure of those systems, but receiving a huge amount of them is also an indication that something not working well.

Think now about Amazon in its early days. Jeff Bezos’ focus at the beginning was not to generate profits immediately. It was to grow fast – so that it could be as big as the Amazon river for the online retail world. profiled Bezos in its Great Leader Series back in 2009, and the excerpt below gives us a glimpse of that strategy and its results:

After inviting 300 friends and acquaintances to test his creation, Bezos took the site live and, within a month, the company had sold books in all 50 states and in 45 countries. Within two months, sales topped $20,000 a week. As Amazon’s growth accelerated, however, skeptics expected that brick-and-mortar retailers like Barnes & Noble or Borders would soon shoulder the young start-up out of the online book market. Others said the company was burning through its cash too quickly. But Bezos did not back down. ‘We’re going to be unprofitable for a long time. And that’s our strategy,’ Bezos told Inc. in 1997.

The doom-and-gloom predictions turned out to be wrong. Amazon earned its first full-year profit in 2003 and, by 2008, the company’s revenue had reached $4 billion. The company succeeded in large part because it quickly embraced e-commerce innovations that improved its customer experience. Such standard operating procedures one-click shopping, e-mail verification of orders, and customer product reviews were not on the radar until Amazon adopted them.

Following the Amazon model, when implementing your internal social networking, here are the things to keep in mind:

  • Grow fast, and avoid fragmentation. It’s inevitable that several enterprise software vendors will come up with their own flavour of social platforms. But having half a dozen social platforms within your organization helps nobody. Make sure you set a clear vision, choose one platform to invest on, and stick to it. Having all your users on the same enterprise platform will pay off in the long run.
  • Open dialogue and transparency is key. Bezos said the following in a recent interview to “One wrote to me and said, ‘You don’t understand your business. You make money when you sell things. Why do you allow these negative customer reviews?’ And when I read that letter, I thought, we don’t make money when we sell things. We make money when we help customers make purchase decisions.” Be open and frank about what you know and what you don’t know. Listen to doubters. Understand their concerns. You’ll learn much more from those skeptical about your vision than from those who drank the Kool-Aid.
  • Critical mass is important, but the number of contributing users is not a hard currency. You need enough activity to keep the ball bouncing and the content fresh, but you don’t need 100% participation. Your actual hard currency is cashed every time a business need is met, especially when met at a speed not possible without a social business platform, not when you reach a record number of users. For example, whenever people find the right information they need for their jobs in a timely manner, a team can finish its deliverable faster because information flows become more efficient. You might even see a process streamlined as the noise-to-signal ratio shrinks due to contextual information being digitized. You can almost hear that proverbial cash register sound.
  • Business value is your profit, but know what to measure when. At the very beginning, your “profit” will be as modest as those by Amazon. They will come in the form of anecdotal stories, first very timidly, then more often and broadly, and finally they will become self-evident. That’s why the metrics that matter at the beginning are success stories and opinion surveys. As broad adoption of a new communication paradigm requires behavioral changes, it will take time for the hard metrics to translate into indisputable evidence of value, but that time will come in the long run. There’s a great quote by Bezos in that same interview about how the stock market determines value in the short-term and in the long-term: “I care very much about our share owners, and so I care very much about our long term share price. I do not follow the stock on a daily basis, and I don’t think there’s any information in it. Benjamin Graham said, ‘In the short term, the stock market is a voting machine. In the long term, it’s a weighing machine.’ And we try to build a company that wants to be weighed and not voted upon.”
  • Keep reinventing your platform. Amazon has repeatedly cannibalized their own revenue streams, moving from Amazon stores to a marketplace model, from physical books to ebooks, and from online goods to online services. If they don’t do it themselves, somebody else will do it against them. Likewise, your social platform must keep pace with the changes in technology, demographics, and human behavior. What works for your users today may not work as well for them tomorrow, so ensure your operating model allows you to keep the platform interesting and fresh.

Of course, this post’s intent is not to bet on the long-term viability of Amazon or Facebook. Maybe neither of them will be here in five or ten years, but at this point in time, Amazon’s model offers a much more robust framework to follow for a social business platform than Facebook. After all, inside the firewall, the focus is much more about business than it’s about social.

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Aaron Kim

Aaron Kim is the Head of Digital Social Collaboration at the Royal Bank of Canada, and led the efforts to bring social business and social collaboration to an organization of 79,000 employees. He’s also been a public speaker at several events across the globe, from the Web 2.0 Expo to JiveWorld, from Singapore to Barcelona. He has a passion for innovation and for making work smarter, more meaningful and rewarding to all. Born and raised in Brazil, to a Korean father and Japanese mother, he also volunteers in several diversity initiatives, inside and outside RBC. In the past, he worked as a consultant both at IBM Canada and Unisys Brazil, having played the roles of solutions architect, Basel II analyst, performance engineer, Java programmer, Unix administrator and environmental biologist. He holds an MBA from the University of Toronto, and a bachelor’s degree in Biology from the Universidade de São Paulo. He lives in Toronto, Canada, is married to Tania and have a son, Lucas.

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