Social Business: The Difference Between Efficient & Effective

Social Business: The Difference Between Efficient & Effective
SideraWorks - The Difference Between Efficient and Effective

David Armano wrote a great post on “Social Business: Where It’s Been and Where It’s Going“.  I would highly encourage you to hop over there and give it a read.

He and I have similar pasts where digital is concerned and we view the space through much the same lens. So needless to say I wholeheartedly agree with his post.  The only thing I’d add however, is that there’s also one big difference when you compare the historical evolution of digital within the business environment and the social business evolution of today.  Looking back, the ‘Business’ portion of the web was, as he rightly states, a transactional one.  Essentially, how do we take our known ways of ‘processing’ business and move that into new ways of interfacing customers to those operational processes. 

The Timing Of Yesterday

That allowed for a great deal of channel disintermediation to take place in particular.  Typically this was done by startups or ‘pure plays’.  From that angle things are following much the same pattern today.  David uses Kickstarter as an example of this, it’s as good as any.  Established brands on the other hand have some choices to make.  As the brand with a disintermediation threat (or opportunity) you have to react.  Namely, if you’re Blockbuster (gone) and you see Netflix catching some traction…when do you make your move?  When do you accept that the long term play no longer lives in your existing plans?  Do you buy them and run parallel to your existing brick & mortar model?  Do you invest in creating your own version and cannibalize part of your existing business?  If you’re a grocery chain and you hear about a massive startup play called WebVan (gone)  taking shape, you have many of the same options.  Borders (gone) and Amazon.  E-commerce development and Pandesic (gone).  The list of choices made and not made is long and varied, it’s filled with those who chose too early, too late, or ignored making a choice entirely.

The Option Of Money

But here’s where the difference appears.  In all cases those companies had the *option* of acting.  The *option* of catching up.  If you threw enough money at the challenge, and made the right choices you could compete against the threat and/or take advantage of the opportunity even if you were late to the game.  Why?  Because in the end it was about building technologies and a brand around them.  It doesn’t matter that Apple may have taken 5 years to develop the notion of an ‘app store’, if I’m Google and I’m willing to spend the money I can decide to compete in the mobile space and build a similar model.  I have that *option*.  It in no way means I will win, it just means I have that option.

The Difference

OK, so what different?  Social Business is not about technologies at its core.  While they certainly are an important piece of the puzzle, they are simply enablers.  It’s about people.  The culture that people develop, the relationships that they form and leverage, striking a mutual balance of benefits between the selfish and selfless.  That difference expresses itself in a couple of very important ways where decision making processes are concerned and the impact they have on your business.

  • The Downside: Unlike technology and brand creation, culture and relationship development are one of the few things that money simply cannot accelerate beyond a certain point.  If you ‘wait and see’ how much traction a potential threat is getting you can no longer ‘catch up’ by just throwing more money at it than you would have if you had started earlier.  That was your risk in the past.  If your competition gets too far ahead of you in that realm now you may not be able to catch up regardless of how deep your pockets are.
  • The Upside: Unlike technology and brand creation, culture and relationship development are one of the few things that you don’t have to write off of an asset sheet.  There is no downside to improving your communication processes.  There is no downside to incorporating knowledge more effectively into your organization.  There is no downside to building an environment that will attract tomorrows top talent.  As many large enterprises learned the hard way, throwing great technology (CRM anyone?) at a problem might make your piggybank lighter and make you feel like you’re addressing it but it ignores things like deep adoption and engagement, connectedness amongst the members of your business ecosystem (partners, employees, customers), etc.  Social Business structures are a method of achieving these things, we strongly believe it is one of the better options out there.

Efficiency ≠ Effectiveness

Somewhere along the way companies got lost thinking that overall efficiency = overall effectiveness.  It doesn’t, those are two different concepts completely.  They can go together, but they aren’t the same thing.  Social Business is about making you more effective, sure it’ll gain you some efficiencies as well but that’s not its general purpose.  Making your company more effective is *never* a bad thing, but it does take time because of its reliance on things like culture and relationships to drive the engine.  It always has, which is why we’ve tried for years to shortcut that process with technology.  The promise of just being able to spend some money and achieve that effectiveness without all the messy human stuff and without all the time expenditure was just too attractive.  We’ve done a good job with efficiencies…not so much with effectiveness.

Time, Time, Time

But what do you do when your competition does become more effective than you as a business overall?  When they start engaging in evolving as a social business today and you don’t?  When effectiveness becomes the differentiator how do you catch up when no matter what business model shifts you attempt to make later they are still being made on top of a company that is simply less effective?  You can’t spend your way out of it at that point, you need the one thing you no longer have enough of….time.  It’s like thinking that you can catch up to your older siblings age by running faster.

Wait And See Is Not An Option

Becoming a social business (call it a a more ‘evolved’ business if you don’t want to say ‘social business’) will not guarantee you become or remain a success.  But it will give you the best possible odds and a great deal more options later on, which is more than can be said if you don’t.  Wait and see is no longer an option, but the good news is that there’s not really a penalty to be paid by starting today.  Sounds like a good choice to have to me.


Matt Ridings – @techguerilla

Photo Credit: Mark Coggins


Matt is the CEO of SideraWorks and a veteran of business strategy and organizational change. His endeavors have included startups, professional services organizations and Fortune 500 companies, and many roles as a business owner, advisor, and investor. View his full bio here or his other posts here. You can find him on twitter at @techguerilla.
  • Chris @ Inspectiv

    Matt, I’m wholeheartedly in agreement. It’s the challenge we face in our work. Most businesses employee the “Wait and See” mindset until the pain becomes noticeable. Then, when is the pain so acute that it makes a company wake up one day and realize that all those cigarettes, heavy drinking, and hard living are going to kill it? As humans, we don’t go see the doctor until we’re sick…and even then, we try to wave it all off in some sort of delusional idea. I see your examples above but for every one of those, we can probably think of  50 (maybe 500) that think their coughing fits are just temporary, that they’re a model of health. Companies hate risk and don’t like to make changes unless they’re literally on death’s door.

    Or these could just be the rantings of someone having a Monday Bummer who will return to his more optimistic viewpoints tomorrow :)

    • Matt Ridings

      Thanks for the great comment Chris (somehow I missed this, sorry for delayed response)

  • joni

    my comment is a question about effectiveness and efficiency regarding those two boss in English premiership arsenals manager and man city manager in their operation to achieve the desired goal ? the time and the cost of the players ………………….?

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