If Social Business is really transforming the way we do business why are most of the stories and cases out there focused on changes to a single business function like marketing, human resources, or customer service? Shouldn’t it act as a change across several of these functions, or for that matter will these functions go away or change so fundamentally that we can no longer tell them apart?
…If these hold out commonly, then we are starting to see the cracks in the Value Chain model at least in terms of the separation of functional areas.
This is an interesting post (and follow-up), but an unfortunate mistake in Rawn Shah’s argument is that he appears to have interpreted the Value Chain as something that describes organisational structure, when in fact it is a model of activities.
Briefly: Porter’s Value Chain concept was introduced in 1985 as a tool to help large organisations make a more holistic cost analysis of their competitive position. It is true that this concept was developed primarily for product-based businesses, but has been adapted for service and knowledge-based organisations. Some people also use the model for qualitative analysis.
But Shah’s main question about organisational structure are worth considering through the lens of the Value Chain. My questions from this perspective are:
- What is the impact of Social Business on different activities in the Value Chain?
- Are organisations reconfiguring themselves enough to completely optimise the linkages between activities, bearing in mind what is possible as a Social Business?
Shah’s example of Social Learning is actually an excellent example of this shift in practice but isn’t a failure of the Value Chain. “Learning” activity is still happening, just in a different way. The question about structure is really about if the centralised corporate training function is actually adding enough value in this new environment.
More broadly I believe that Social Business is starting to have an impact, but most organisations have not fully optimised for it. Time to use the Value Chain to drive change, rather than throwing the baby out with the bath water.