Social networking sites such as Facebook, MySpace, LinkedIn, Plaxo and Ning are getting a larger than usual following these days, thanks in no small part to the current financial crisis.
In fact, it would not be unreasonable to predict that these sites will see their membership numbers soar in the coming months as widespread insecurity drives people to connect with others to boost their social capital.
This is the view of INSEAD’s Soumitra Dutta and Matthew Fraser. Dutta is the Roland Berger Chaired Professor of Business and Technology and Professor of Information Systems, and Fraser is a Senior Research Fellow. Their recently-published book, 'Throwing Sheep in the Boardroom: How Online Social Networking Will Change Your Life, Work and World', not just turns social networking on its head, but also reveals that the change that is happening in the virtual world is revolutionary.
“I think social networking is something which is fundamentally changing the nature of computing. If you think about computation and computing, a lot of it is about transactions. And today that is shifting and it's becoming much more about social interactions. So computing is becoming a social phenomenon fundamentally. And that is driving change. So when you mention the subtitle of the book, the key phrase out there is change, and change is happening across all facets of our life as individuals, as members of society, and also in corporations at large,” says Dutta.
The book’s playful title, is by no means accidental, but rather, is true to the essence of the book’s main theme.
“What we decided to do was to take two sort of contradictory images because basically the book deals with Web 2.0 social networking in a business environment,” Fraser explains. “So we brainstormed originally and talked about what represents both of these worlds – the virtual world of social networking and the organisational world of corporations.”
“So we came up with throwing sheep. As you may know, throwing sheep is a Facebook gesture where you throw a sheep at one of your Facebook friends and a little sheep appears on your screen … And then we thought okay now, the book is largely about organisational issues, business issues, innovations and corporations, so what kind of image can we find there to merge with the Web 2.0 world? And the most obvious one was a boardroom where executives and corporate directors meet. So we took the playful notion of sheep and we put it in the boardroom and found the title ‘Throwing Sheep in the Boardroom’”.
Web 2.0, Fraser elaborates, is a ‘networked’ web, as opposed to Web 1.0, the web of the 1990s, predominantly a ‘push’ web where you found information. So being a networked web, Web 2.0 is a platform which Dutta and Fraser have termed “horizontal” – horizontality being key to their book, as organisations tend to be structured along a vertical logic or network.
Therefore with the two networks converging because of current market conditions, the untold virtues of Web 2.0 are surfacing. “The Web 2.0 world allows (senior executives), for example, a wonderful chance to connect directly with people across the organisation at much lower levels. It allows them to connect with some of their customers and stakeholders across the world. It allows them to get more direct feedback. It allows them to also participate in this process of creating the world we're living in today,” says Dutta.
“In the Web 2.0 world, those traditional notions are shattered by a horizontal notion of status which is based largely on performance and expertise, and what you actually do, which we call democratisation of status. In other words, status is sort of flattened. It's not based on what your title is. It's based on what you can contribute to a dialogue or to a project or, if in a corporation, to some kind of corporate challenge,” adds Fraser.
Beyond the boardroom
Web 2.0 has even gone beyond the boardroom. According to Fraser, many corporations are now using Web 2.0 tools for Research and Development (R&D), which was virtually unheard of in the traditional, vertical and silo-based structure of most corporations. Big companies, he says, even Fortune 500 firms such as Proctor & Gamble and General Motors are now inventing new products horizontally by collaborating outside the boundaries of their companies and networking with their customers.
“So the notion is that when you have horizontal networks it's a much more efficient way to find true expertise because the reality is that it's not necessarily true that the smartest and most innovative guys are the guys in the white frocks who are working for your company. There are all kinds of expertise outside and in all kinds of unlikely, unexpected places. So Web 2.0 harnesses what is often called collective intelligence and the way you harness that is by going horizontally,” he adds.
Dutta says reaching out will not just happen in the immediate vicinity of the corporation but will also follow the markets. “If you're trying to sell now in India and China you need to reach out to the people in those markets. Web 2.0 platforms have provided an incredibly effective and efficient means of reaching out to new customer groups, to new market segments, and to get that input to help you to make better decisions.”