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1/27/2009
11:33 PM
Venkatesh Rao
Venkatesh Rao
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A Social Media Capability Maturity Model: Part I

I promised in December that I would share a social media capability maturity model that I've been sketching out, so here goes. Capability maturity models (CMMs) are a standard part of our conceptual vocabulary when talking about organizational change, but applying the idea to social media presents some special problems which I need to discuss first. It is not a simple matter of drawing a little evolution curve and labeling some arbitrarily chosen levels of competence. In other words, if you are thinking in terms of a diagram like this (with indicators like "Level 1.2: some employees blog; Level 1.8: many employees blog, most people twitter"), STOP!CMMs 101We are all familiar with ideas like the software development CMM. In Competing with Analytics, Davenport and Harris offered one for analytics capabilities. CMMs are useful wherever you think there is an adoption and diffusion process going on in the economy, around a new and broadly useful capability innovation. CMMs help guide significant change in an organization's behavior. Hype cycles help you time the adoption decision. When a capability is first developed, everybody is fumbling with it. Then some organizations get the formula right, and go through the learning curve to become the first sui generis "mature" players. Somebody, often an analyst or other neutral "thought leader" notices that a pattern has emerged, and codifies and documents it, and holds up one of the pioneering companies as a benchmark (for example, Motorola and Six Sigma).This then, becomes the road map with which later adopters attempt to catch up with the trailblazing pioneers. Those who do not adapt start to lose competitive advantage and sometimes go out of business, and when the organizational innovation finally diffuses completely through the economy, sector by sector, it becomes a cost of doing business. For most of the economy, it is a period of relatively slow Darwinian evolution, driven by the rate of the diffusion. Unless you happen to be a vendor of the new capability or whatever it replaces, process innovations only create "keep up" work but do not fundamentally mess with your market or business model.Or at least that's the case with well-defined capabilities with functionally localized impact like (say) the telephone. It caused a new market to grow, another (paper mail) to be disrupted, and a "keep up" pressure on everybody else by allowing one function (oral communication) to become more powerful. Furniture markers still made furniture, potato chip makers still made potato chips. Some furniture and potato chip makers adopted the telephone earlier than others. A few unfortunate players might have been in such bad shape that delay in adopting the telephone killed them. But survival in these markets still depended primarily on the quality of your furniture or potato chips. Telephone adoption at best provided a temporary advantage to a few players, and a final insurmountable challenge to already unhealthy outfits.In other words, most capability innovations are only locally disruptive (to vendors of substitute capabilities). What happens when new capabilities emerge that are too powerful to simply diffuse through the economy and become absorbed? I call these fertile capabilities. They cause across-the board disruption in all sectors, and must be treated differently.Fertile CapabilitiesThe problem with highly protean technologies like the original Internet is that they are highly fertile. You can use them in a vast number of ways. They open up opportunities for disruptive new business models, with differentiated products and services, in every sector, not just the capability sector. The telephone might have allowed the automobile sector to manage inventories better, but it did not give us new types of cars. The cellphone and GPS, on the other hand, might give us new types of cars. You can think of a spectrum of fertility, based on the extent to which a capability innovation supports new business models in all sectors of the economy. For example, you could say:

  • Not fertile: post-its, CDs
  • Somewhat fertile: MP3s
  • Medium fertile: PCs
  • Very fertile: The Internet, cell phones
But across the board disruption of business models, dramatic as it sounds, isn't the most profound impact a capability innovation can have. There is an even more dramatic level -- disruption of the axioms of the economy itself. The economy, remember, consists of a set of businesses that manifest business models. Business models are expressions of design patterns within an architectural space created by an organizing technology, and for the last 100 odd years, this organizing technology has been the modern corporation. All process/capability innovations in the 100 years before social media merely expanded the vocabulary of the language known as the "corporation." When Amazon.com appeared in the nineties, it merely added another variety of "bookstore corporation."Fertile capabilities "merely" redefine markets throughout the economy, and cause some shifting of boundaries, creation and destruction of a few sectors, and redistribution of wealth. Once every few centuries though, a vastly more powerful force comes along: an organizing technology capability. A capability that changes the very language with which the economy is written."Organizing Technology" CapabilitiesYou think I am exaggerating? What else would you call an economy where previously minor market externalities start defining the dynamics of markets? Look around you: it isn't just "non-profit" corporations like open source foundations that are messing with markets. Some economic organization forces aren't even any sort of legal corporation, like the effort that came together to respond to Hurricane Katrina. We've seen flash mobs and Barcamps. We saw crowd journalism (we are way beyond gentlemanly "citizen" journalism led by the "professionals") substituting for regular journalism in the Mumbai attacks. We've seen consumers get uneasily redefined as prosumers, often with no corporation at the center at all.Not even the original Internet had an impact like this. The organizing technology we know as the "corporation" is being threatened. There are only four other organizing technologies that caused economic-axiom level disruption on the scale we are about to see: fire (night-time economics), the wheel and domestication of draught animals (large-area economics), farming (settler economics) and movable type (democracies and corporations).And that, by the way, is why I did not call this an Enterprise 2.0 capability maturity model, despite the name of this site. We need a CMM that can help you navigate your way to whatever weird new species you and your company might morph into. We need to countenance the possibility that the smartest way for you to "go 2.0" might be to dissolve your corporation altogether, and reorganize your employees as a network of freelancers who hire each other by the project. Or maybe your company needs to become a non-profit.Before you ask "what is the ROI of social media" you need to consider the possibility that your market is organizing itself around nonprofit institutions that don't even look for dollar ROI. Before you wonder how to use twitter in marketing, you might want to consider the possibility that twitter is undermining the very function of marketing.When I continue next time, we'll get started. You'll need a spreadsheet tool. I hope you see the significance of the choice you have: one of your options is Google spreadsheets. It is free.Venkatesh G. Rao writes a blog on business and innovation at www.ribbonfarm.com, and is a Web technology researcher at Xerox. The views expressed in this blog are his personal ones and do not represent the views of his employer.

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