Leveraging Enterprise Web 2.0 for competitive advantage

What is Enterprise Web 2.0?

For the last 3 years, web 2.0 and social networking have been all the rage in the Internet community. This is where the VC money is going, the media attention is focused and users are spending much of their time. Businesses are still trying to figure out what does it mean for them. Applying web 2.0 principals and attitudes to business and the enterprsie can be called enterprise web 2.0

Many tend to think that becoming a 2.0 organization as the use of flashy interfaces, communities, blogs, wikis and user generated content and tried to jump on the bandwagon by adding these to their sites without comprehending the deeper and more fundamental cultural changes that make these tools effective, and have seen little gain.

Web 2.0 is about attitudes and a new way of interaction with all constituents, customers, employees, and partners.

 

With all its hype, cool startups and sexy conferences, web 2.0 still baffles many business people who see it as a playground for kids (MySpace, Facebook, YouTube) or a get-rich scam for young entrepreneurs and VC’s. Many who have been through Bubble 1.0 would rather wait until the web 2.0 fad disappears to see what is left standing. Tim O’reilly has provided what many see as the most comprehensive definition of web 2.0. And while his explanation is very thorough, it is also technical in nature.

 

My favorite definition comes from Ian Davis who wrote:

Web 2.0 is an attitude, not a technology. It’s about enabling and encouraging participation through open applications and services. By open I mean technically open with appropriate APIs but also, more importantly, socially open, with rights granted to use the content in new and exciting contexts.”

In my opinion, web 2.0 is indeed defined as an attitude that can be personal or organizational. A web 2.0 organization adds specific terms and values to its code of conduct and sets priorities and incentives to promote them.

We see web 2.0 attitudes, or what I like to call the web 2.0 spirit, as made of the following attitudes:

  • Open: you don’t have to share your source code to be open but from the application to the users, the approach is open. Easy to integrate with, easy to add to. Built on Sharing. Open to new ideas, Flexible, Agile, Simple, and Diverse.
  • Interactive: the interaction among users and active participation is a core element of Web 2.0. The ability of customer and partners to respond and engage in discussions, post reviews, comments, thoughts and ideas. Agree and disagree. Provide a different point of view. Support and promote.
  • Transparent: Do not hide, lie, spin, manipulate, threat, or intimidate. The Internet walls are nonexistent and everything you say or do, internally or externally will be exposed. Therefore: Share as much information as possible, acknowledge mistakes, and explain decisions.
  • Collaborative: Listen, encourage opinions and group decisions. True collaboration is a tremendous thing producing a result much greater than the sum of the parts. It can only flourish in a nurturing environment.
  • Social: Web 2.0 is about building relationships, trust, playing well with others, give and take, respect of each player and of the social order that is in place. Social corporate responsibility, caring about the environment and about the local community are very important as well.

 

Andrew McAfee at Harvard likes to add the term Emergent, noting that out of many local interactions as web 2.0 facilitates, comes higher level structures. I’ll expand that definition to include emergence of order and structure out of the seemed chaos that is online interaction. It is the transcendence of web 2.0 communities that created Wikipedia.

 

What can be gained?

Enterprise web 2.0 promises substantial incentives for early adopters:

  • Enhanced brand image, exposure and buzz. As influence circles expand, using new methods for communication and data distribution will reach an ever expanding user base.
  • Improved customer relationships and increased loyalty. Customers will appreciate the new approach that respects and listens to them.
  • Faster feedback cycle and agile response to market opportunities. By providing real avenues for customer collaboration and listening to chatter and monitoring usage, companies can create faster release cycles and quicker response methods.
  • Improved utilization of internal creativity and innovation. When employees at all level are engaged is collaboration and discussion, great ideas and solutions can quickly surface, get reviewed and implemented
  • Better lead generation and inbound traffic. Beyond search, activity in the social web can be a great source of traffic and referrals.
  • New business channels. Whether it is finally establishing a DTC channel to leveraging social commerce applications, the new landscape provides new opportunities and new potential partnerships.

Adoption Challenges:

So now, show of hands. Has your organization embraced the web 2.0 spirit? Chances are that unless you are working for a web 2.0 startup, the most you have seen is the introduction of a limited corporate blog or a Wiki’s coming up on your intranet.

Many companies have a deep rooted problem with the web 2.0 spirit. It contradicts some of the fundamental principles of corporate mentality and therefore risky to undertake. In my experience very few companies have truly bought into this attitude and at the most are paying lip service by implementing some basic enterprise 2.0 applications to replace their failed and unused Intranets and KM systems.

Bob Warfield provided a very insightful discussion as to the reasons companies are wary of embracing web 2.0:

The headlong rush the Web brings to expose everything to everyone scares the heck out of most corporate types. Their two biggest requests for Web 2.0 initiatives are Governance and Security, and the reasons for it are exactly what we’ve been discussing. It isn’t just that they have “control issues”. There are sound business reasons why controls have to be in place.

Morale: Do we really want everyone to know how poorly some initiative is going? How will it help to tell those who can’t make a difference and would only be depressed by the knowledge? Is it fair to expose some internal squabble that was mostly sound and fury signifying nothing? Won’t that just unfairly tarnish some otherwise good people’s reputations and make them less effective?

Governance: Is the information legal and appropriate for everyone to know in this age of SOX and Securities Laws?

Competitive Advantage: Do I want to risk giving my competitors access to key information because I’ve distributed it too broadly?

Still, the web 2.0 spirit as reflected in the actions, habits and expectations of users WILL impact the way companies do business. Some of the most important trends include:

  • Loss of control: as mentioned above, companies no longer have absolute control over their brand, products and services and how they are portrayed. From rumor sites to product reviews and fake commercials, people have many more ways to learn about you and form opinions.
  • Opinions matter. 68% of shoppers read products reviews before making a purchase.
  • Wider influence circles. Information (good and bad) can quickly spread through influence and social circles.
  • Transparency is expected and recent cover-up attempts by companies like Merck and Bear Stearns were not tolerated.

Companies will have to adapt because the old practices are getting them in trouble and new opportunities for leadership position are being lost due to lack of clear web 2.0 corporate strategy or what we would call enterprise web 2.0

By embracing the new enterprise web 2.0 paradigm, businesses can create long lasting changes that will truly resonate with audiences beyond the quick fix of adding a marketing blog to the web site and some promotional videos. As these changes take time to implement, early adopters and market leaders can create a significant competitive advantage by differentiating themselves and reaping the benefits.

Let us know what you think

5 thoughts on “Leveraging Enterprise Web 2.0 for competitive advantage

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  5. Great article. I like to think Web 2 is all about finding and promoting people or persons like us! We relate best to people with similar problems, concerns and solutions like ourselves. We have to remember business like the real social world there’s always the good and bad. It gives us dimension as well as something to strive better to be. If we’ve problems.. let’s address them but in the manner you’ve quoted!

    The attitudes you’ve posted for web 2.0 emarketing pros are really on the ball! I could not have said it better!

    I would add for any company hoping to use Web 2.0 it’s important that the company embraces it at all levels. The culture of Web 2. 0 ought to become the company offline.

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