21/09/11

By JP Rangaswami, Chief Scientist, Salesforce.com

I’ve just come back from Dreamforce , where Marc Benioff revealed his vision for the Social Enterprise . It’s an amazing vision, and well worth spending time on. If you couldn’t make it and still want to take a look at what happened, the keynotes are available here (the Day One keynote), here (the Day Two keynote) and here (the keynote session with Google Chairman Dr Eric Schmidt).

People find it hard to describe Dreamforce. Last year, one of the journalists present (I believe it was Victoria Barret of Forbes). compared the event to a political convention; President Clinton spoke last year, and European Digital Agenda Commissioner Neelie Kroes was there this year. With all the musicians present (over the last two years Neil Young, Stevie Wonder, Will.i.am, MC Hammer and Metallica have been there; in addition, Joanna Newsom, Neil Young and Alanis Morissette played at the UCSF Benioff Children’s Hospital Benefit Concert during the week) some people liken it to a rock festival. And this year, with over 45,000 registered, it became the world’s largest enterprise tech conference.

I think it’s all of the above, a watershed for the enterprise software industry. If it was just about salesforce.com making a few announcements, I would not write about it on this blog; my readers don’t expect it. If it was about the future of enterprise software, I would write about it: a significant proportion of the posts I’ve written here over the last six or seven years are on that topic.

Now, having come back from Dreamforce, and having had the opportunity to speak to customers on the way back, and having had time to rest and reflect, I think it’s about more than that.

I think Marc Benioff’s vision for the Social Enterprise is about more than just enterprise software, it is about changing the way customers deal with companies. Transforming it. Irrevocably.

“The major advances in civilisation are processes that all but wreck the societies in which they occur”

That quote is something I treasure, one that I found in Marshall McLuhan’s absolutely brilliant book The Medium Is The Massage , which he co-authored with Quentin Fiore . It’s a fantastic book, incredibly prescient. Just like The Cluetrain Manifesto , written decades later, whence comes another of my favourite quotes:

“We are not seats or eyeballs or end users or consumers. We are human beings – and our reach exceeds your grasp. Deal with it.”

[Disclaimer: I count the authors of the Cluetrain Manifesto amongst my friends, and had the opportunity to contribute a chapter to the 10th Anniversary Edition of their bestselling book]

There’s a third quote to bring to your attention. This comes from Dr Eric Schmidt, Chairman, Google, while in conversation with Marc Benioff at Dreamforce. I may not have the words verbatim, but I’m sure I captured the sense of what he said:

Microsoft organised itself around the structure of the industry; Apple organised itself around the customer. You have to organise around the customer.

I think these quotations are at the heart of the Social Enterprise. We’re at a point of advance in at least a part of “civilisation”, how consumers engage with businesses.

This advance is based on three big learnings:

•learning that the customer has always had a voice, but businesses haven’t always had the tools to hear

•learning that the customer is now using that voice, with mobile devices and in social networks, to engage with businesses

•learning that those conversations are, too often, characterised by the absence of the businesses they’re about
Ten years ago, the Cluetrain authors were reminding us that customers had a voice, and that ignoring them was futile; more recently, Eric Schmidt was reminding us that the only valid response for any business is to organise around the customer; and, over 40 years ago, Marshall McLuhan et al were warning us that the changes would have a significant impact on life as we knew it.

All this in itself may not sound like something new: we’ve been talking about organising around the customer for a long time, customer-centricity is a decades-old term. But, as you look more closely at the Benioff vision of the Social Enterprise, you will find that there are some radical shifts away from the past:

•We’re now talking about real customers engaging directly with real businesses, in “real time”, a level of engagement hitherto unseen. No more “thinking a reflection of the moon in the pond is the sun” proxy approaches, no more focus groups, no more control samples. Actual customers. Saying what they think, about you, your products and services, their wants and needs.

•We’re now talking about real customers doing this in full view of other customers, a level of transparency hitherto unseen. No more price and contract obscurity, no more “what they don’t know won’t hurt us”.

•We’re now talking about real customers doing this with multiple businesses at the same time, a level of maturity hitherto unseen in retail market models. Not just across one company’s supply chain or distribution network, but “organised around the customer”.

Because you know something? That’s what customers would do, given the chance. Organise around themselves, their needs, their preferences, their perspectives.

And it so happens they now have the chance. And they’re taking it.

The Social Enterprise, as Burberry CEO Angela Ahrendts stated during the conference, is not optional. “You have to do this. You have to be social. Otherwise I don’t know what your business model is in five years”. We ain’t seen nothin’ yet.

Customers are already in the process of organising businesses around them; to be around in five years, businesses will have to get better at letting customers do this.

•Understanding what the customer is about, and letting them understand what your business is about, is the first step

•Customers and businesses becoming part of the same networks, with the ability to speak as well as to listen, is the second step

•Rebuilding markets the way customers would build them is the third step

Those of you familiar with Doc Searls and his works will know that he’s been banging on about this for at least a decade, most recently via VRM. Markets are conversations. Those conversations are conducted by customers. They decide.

That’s what I believe Marc Benioff has been talking about, a vision that transforms the way customers engage with businesses.

The Social Enterprise vision is about rebuilding markets the way customers would build them in the first place. That vision needs an enabling platform, a platform modelled around ecosystems rather than vertically integrated stacks, open rather than proprietary, actively engaging the customer and engaged by the customer.

That in turn requires an approach of federation rather than competition, federation with organisations that have similar principles, prepared to be built around the customer at the behest of the customer.

Salesforce.com has lined up with that vision and consequently has been executing to it for some time now. As one organisation.

There will be others. There must be others. Others who are prepared to be organised around the customer, by the customer.

Peter Drucker famously said:

What the customer buys and considers value is never a product. It is always utility — that is, what a product does for him.

He also said:

People make shoes, not money.

And, for my last quote, again from Drucker:

The purpose of business is to create a customer.

Put those three together and you begin to see the social enterprise. It’s still early days. As customers begin to reorganise businesses around themselves, there will be many problems to solve, problems of federation and interoperability and portability. Problems that have been obfuscated in the past by incumbents with vested interests. Problems that will be solved by the Social Enterprise.

The Social Enterprise is here. Customers have seen it and won’t let go. The businesses that will succeed are those that go where the customer has gone.

This article originally appeared on JP’s blog, confusedofcalcutta.com

You can follow JP on Twitter @jobsworth

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