“Facebook ban a little hasty”: counting the benefits of social networks to the enterprise

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Following up on yesterday’s kerfuffle on Facebook in the enterprise, the Australian Financial Review has an article on page 3 titled “Facebook ban a little hasty”. While briefing mentioning the spurious numbers provided by SurfControl, they report that Pacific Publications, a major magazine publisher, has banned employees from accessing Facebook, while law firm Arnold Bloch Leibler blocks Facebook from 8am to 6pm. Apparently in the case of Pacific Magazines, bandwidth and system crashes were mentioned as reasons for the ban. They quote Bruce McCabe of S2 Intelligence describing their approach as “amateurish” and saying “it won’t work and they will eventually get over it.”

The article finishes by quoting me:

But this should be contrasted with companies that actively encouraged their staff to use networking sites, such as Deloitte, IBM and PricewaterhouseCoopers, IT commentator Ross Dawson said.

“Being able to reach out to the right person for expertise and knowledge – this is one of the primary values of any knowledge-based worker,” he said.

All in all, a rather more balanced view than the scare-mongering appearing in most of the media yesterday. From here, the task is to educate the corporate sector more on the benefits of effective social networks inside and outside the organization, and how best to support it.

I also did three radio interviews yesterday, in each case the story being the benefits to organizations of their employees using social networks well.

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Companies that close networking doors jeopardize their future

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There has been extensive coverage in the Australian media today about a press release from internet filtering company SurfControl, in which they make up a spurious figure that the use of Facebook on company time is costing business up to A$5 billion a year. This is based on 800,000 employees spending an hour a day on Facebook, numbers which have appear to have no basis other than the imagination of the report’s authors. SurfControl sells software to block employees using sites such as Facebook. Their vested interest has resulted in a highly inaccurate and distorted view of the use of social networks in organizations being presented in the media.

Of course, this is not to say that there aren’t plenty of company employees working on improving their social lives while they draw a salary.

However, the more important side of the story is that in a knowledge-based economy such as Australia, effective networking is absolutely essential to corporate productivity.

As a research leader at the University of Virginia’s Network Roundtable, the world’s premier organization studying organizational networks, I both do extensive research on networks in and across companies, and have access to the best research globally in the field.

Research at institutions such as Harvard and M.I.T. has consistently shown that employees’ personal networks are in many cases the single biggest factor impacting their productivity and ability to contribute to the company.

This is why organizations such as IBM, Procter & Gamble, PricewaterhouseCoopers and most world-class organizations I am aware of are focusing on how they can HELP their employees to network and build connections inside and outside their organizations, not hinder them.

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Media industry network analysis – tools for better strategic decisions

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Among the most powerful applications of network analysis is understanding industry structure and the implications for strategy. While this is still a relatively new field, we are beginning to uncover some very specific approaches and applications to industry network analysis. If you go to a large strategy consulting firm to provide strategy recommendations, you will get a thorough analysis of your industry. However this is almost always highly linear, looking at market shares, value chains, and industry trends. This hides the richness of highly interconnected industry structures. The next 5-10 years of strategy analysis will see a far greater use of network analysis to understand leverage points for

In the Future of Media Report 2007, we included some new analysis by Laurie Lock Lee. In the Future of Media Report 2006 we used Laurie’s analysis of shifts in media industry networks from 2001 to 2006, and earlier this year I featured some high-level analysis on the network structure of the Australian media industry. This new network analysis goes considerably deeper, analyzing the change in industry structure before and after a significant acquistion, by Macquarie Media Group of Southern Cross Broadcasting. An overview of the analysis is below. See the Future of Media Report 2007 for the full details.

There are a wide range of highly practical applications of industry network analysis. One, as illustrated in the example below, is analysis of industry structure before and after potential acquisitions or divestments by your company or your competitors. This can show the industry impact of major transactions, and provide further insights into their value. Another example in the media sector which we are currently exploring is examining the rich networks between advertisers, ad agencies, media buyers, and publishers. Viewing this from a network (rather than a simple market share) perspective enables very specific insights into how advertising spending can be shifted from one publisher to another. I’ll continue to post high-level views of some of this work and the kinds of benefits our clients are deriving from this.

MEDIA INDUSTRY NETWORK ANALYSIS: CASE STUDY

Laurie Lock Lee, Optimice

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Facebook begins to open up – recognizing and riding the inevitable trend

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Last week, in the heat of the grand discussion on openness in social networks, I wrote in a blog post titled Is the trend to openness accelerating? Social networks as an inflection point:

I see the trend towards openness accelerating, which makes playing the lock-in game ever more difficult. I think that the current debate reflects that today there is far greater visibility for lack of openness in offerings, and less tolerance for that. What is currently playing out in the social network space is a fantastic case study that is relevant across all business segments. After MySpace dominating the social networking space, Facebook has shifted to the front very quickly, through openness in its APIs. It is at risk of having its leadership short-lived, if others quickly leap on to people’s preference for open systems, especially when it concerns their personal relationships.

However the more likely path is that Facebook sees the trends, and swiftly opens out its systems. Any incumbent is loath to shift to greater openness, but given the players and the landscape today, I don’t think that Facebook is not going to hold on too tightly for too long.

Looking back in a year or two from now, we may see that now was an inflection point in openness in social networks. We may also find that this shift has impacted many other facets of the information and businesses worlds. The jury is still out, but I think the evidence points to the current landscape being a manifestation of the acceleration of openness.

Today, just one week after I predicted that Facebook would open out, Dave Winer writes Facebook *is* opening up, noting that he’s discovered some new RSS feeds from Facebook, including a Friends Update Status, and Friends Posted Item. Paul Thompson says that the Friends Update Status has been available since last month, while Techcrunch says that this will win Facebook a lot of friends.

Providing RSS feeds for key information in Facebook basically means that you don’t need to go to Facebook to see your updates and information. You still have to maintain a profile in Facebook, and it will still be the platform for your social networks, but you are far freer in how you use it. One implication is it’s harder to monetize, as you can’t be sure of presenting advertisement to your users. However if being freer means you can maintain the role of predominant social network, you definitely will find other ways of making money, not least because the majority of an increased network will choose to interface to their network through Facebook.

Ross Dawson answers six pressing questions on online social networking

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I recently created a 4 minute video in which I briefly answer six questions on online social networking:

What are the benefits of online social networks?

How do I know if my obsession with Facebook has gone too far?

What is the etiquette for ignoring invitations on social network?

How do Australians compare with others in using online social networks?

Will email die now that all my friends keep in touch on Facebook?

What should companies think about their staff using social networks?

The video was created for an Australian audience, so for others, please draw your own implications on how your country compares on uptake of social networks. See here for recent figures on comparisons of the usage of online social networks US, UK, and Australia.

Is the trend to openness accelerating? Social networks as an inflection point

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The openness in social networks debate continues to flourish. Some of the more interesting and prominent commentary in the last couple of days, since my post on Openness, network effects, and competition in social networks, are:

Scott Gilbertson (in Wired): Slap in the Facebook – It’s Time for Social Networks to Open Up. Scott takes the pulpit, and calls on the web programming community to develop a framework based on open standards, and offering tips on how to create your own profile using open tools.

Dan Farber: Facebook, social capitalists and open networks. Dan thinks that revolution isn’t yet ripe, as users are still content to play within walled gardens.

Anshu Sharma: Identity crisis in the land of social networks and platforms. Anshu draws the distinction between the Internet as the platform and the application as the platform, suggesting that if Google, for example, were to offer an entirely open social networking platform, this would dominate.

Marc Canter. The Chess game of social networking. Marc has been at the heart of open thinking on social networks for at least 6 years (we had a good conversation on this in 2002) – he reflects on where this has come from, data sharing today, and suggests that this is about creating a playing space rather than winners or losers.

Pete Cashmore. Mashable supports the Open Friends Format (OFF?). Pete supports the move to open standards for social networks.

Dare Obansanjo. Some thoughts on open social networks. Dare provides distinctions for four different kinds of openness in social networks.

In my 2002 book Living Networks I wrote:

“Because the trend to open, accepted standards is clear, it is far better to go with it rather than fight it. Long-term success must be based on aligning yourself with these shifts.”

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The 9 motivations to participate in networks

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A couple of years ago in the course of some consulting work I developed a framework of what motivates people to participate in networks of all kinds. This includes and goes beyond the Facebooks and MySpaces of today, to community-based and values-based initiatives. These motivations need to be understood by organizations wanting to implement open innovation by drawing on external resources, environmental and social change groups, politicians and any initiative that involves drawing in broad participation from outside organizational boundaries.

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The nine motivations are:

* Financial. Immediate or future financial rewards

* Contribution. Feeling of contributing to something socially worthwhile.

* Outcome. Benefiting by using or applying the outcomes created by the network.

* Learning. Learning from leading thinkers or peers or through the participation itself.

* Community. Feeling of belonging to and participating in a group with shared values or interests.

* Reputation. Enhanced reputation and esteem from others.

* Coolness. Being involved in interesting, exciting, and novel domains with broad appeal.

* Fun. Enjoying play, exploration, and social interaction.

* Fairness. Feeling there is equitable share of rewards (this is in fact most often a demotivator, if people believe that reward sharing in the network is inequitable).

When planning any network-based initiative, it’s valuable to consider each of these motivations, which ones will be the most important in driving participation, and how you can support these. It’s also a useful exercise to examine existing projects that are similar to yours. This allows you to see both how well other projects are addressing the relevant motivators, and how you can differentiate your initiative by calling on other motivations, or being more effective at providing these.

Openness, network effects, and competition in social networks

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The social networking space has opened out significantly today, with two significant announcements changing the state of play and introducing a new level of competition. From the very beginning of the social networking space, with the launch of sixdegrees.com in 2000 (which gave up the ghost in January 2002), the fundamental underlying issue was whether social networks would be entirely exclusive and competitive, or whether they would in some way integrate to create a global social networking space. Today’s news suggests that finally, after many years of highly competitive play, there is the potential for more open social networking systems.

The first key news is Plaxo’s release of a new social network Pulse, due out on Monday (Robert Scoble has provided pre-release news, apparently leaked at the end of a long party). Almost everyone has been subjected to emails from Plaxo over the last few years asking them to confirm their contact details. From the birth of Plaxo, it was clear their ultimate business model was going to be something quite different, building on the extraordinary database of members and contact information they were acquiring. With the recent surge in popularity in Facebook – which means that now a far broader segment of the population is familiar with social networks – Plaxo has decided the time is right to make their move.

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Engaging people rather than advertising in virtual worlds

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I’ve had several media appearances lately on marketing and advertising in virtual worlds, including writing a short piece in Marketing magazine on “Are virtual worlds an over-hyped waste of time for marketers?”, and a recent interview on an ABC TV program. The ABC TV segment was largely about billboard advertising, so I showed the TV crew billboards in Second Life, Habbo Hotels and Coke Studios for them to film for the program and to go along with my interview. The thrust of the TV segment was that you can’t escape advertising, even in Second Life. Another person they interviewed on the show said that it could backfire to advertise in virtual worlds, since people want to escape to somewhere different. However I think people implicitly understand that something they get for free has to be paid for somehow. As I’ve written before, some people will choose to pay to avoid advertisements. The TV crew managed to find a real-world version of a Telstra billboard I showed them in Second Life. While Telstra BigPond Managing Director Justin Milne gave the party line in his interview on the TV program, I doubt he was happy that I was wearing a free T-shirt with advertising from Deutsche Telekom as I guided the TV crew around Second Life.

However I’m hardly a major proponent of advertising in virtual worlds, and I think the TV program was starting from a misguided premise. Given that advertising – in the sense of annoying people with messages – is getting less useful wherever it’s done, it’s hardly any better in a virtual world. Marketing, in the broadest sense, is a completely different matter. It is far easier to engage people in meaningful ways in an interactive space. You can create experiences that people respond to, learn from their responses, change what you do in real and virtual worlds, and build both brand and relationships over time. That is just part of the power of being involved in virtual worlds.

Australia needs a debate on why it lags in online and network thinking

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Smartcompany.com.au, the online-only business magazine which launched in February and is already doing very well, has an article titled Left behind Down Under (second story on the page) based on our release from last week and an interview with me. Some of the quotes from the piece:

Ross Dawson, founding chairman of Future Exploration Network, says the average bandwidth of Australian broadband is around a third that of the UK and a fifth that of the US.

“When you go to access video and audio it is so slow and clunky many people give up, so people spend less time on sites,” he says. The average time on an internet site in Australia is just under a minute.

Cultural issues also affecting Australians’ online usage. “We are less inclined to put forward an opinion in a social environment,” he says. “This means that we are slower in participating on blogs, forums and social networking sites.”

Dawson says the takeup of Web 2.0 by businesses is also trailing other countries, which is affecting productivity and marketing. “In the US in companies like Disney and McDonald’s use less email and do far more collaboration on projects, which contributes to better outcomes.”

Australians are also slower to use blogging platforms and other Web 2.0 for marketing.

“Organisations need to be far more innovative in how they use technologies internally and externally because as we shift to the global network economy we must be connected to other ideas and knowledge or we will be disadvantaged as a nation.”

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