Executive Summary: Advisory & Services Firm Social Business Adoption 2012

Advisory & Services Firm Social Business Adoption 2012 is a research survey that looks at social business advisory/consulting firms in a new way. Using quantitative methods, I compared consultancies according to the needs of clients who want to transform their organizations with social business. The twelve metrics measure firms’ performance in business impact, sociality, and transformation areas, and they rank firms within firm categories and overall.

Now prospective clients can compare Strategy firms, Big Four firms, Agencies, Analysts, Enterprise IT firms, and Pureplays quantitatively. Moreover, consulting firms can use these metrics for guidance in building out their social business practices.

I launched CSRA in 2006, and we have always practiced social business as transformation. Client work in social business transformation enables me to see where the market is going, so this survey considers social business firms from that future state.

[UPDATE 8 Mar] Now available: “Executive Briefing” is even more summarized (14-slides) in two versions: Guidance for Clients and Guidance for Firms. Research survey results will be most useful if you follow the links to understand the survey design and methods.

Research Survey Outline [Updated 11 Mar]

Background

• Background outlines research survey design principles, mission, method, and definitions.

Rankings

• Top10 Social Business Overall rankings shows firms across categories according to their overall scores; Overall sums Practice and Leadership scores, which are useful guidance for selecting an advisory firm/consultancy.
• Top10 Social Business Practice rankings compares firms in two areas of practice: their social business transformation services and how they use social business themselves.
• Top10 Social Business Leadership rankings reflects firms’ commitment to social business as transformation based on their thought leadership, case studies, and other artifacts.

Interpreting Results

• The Social Business Life Cycle shows the different phases of clients’ adoption of social business for transformation. Advisory firms are strong in some parts of the life cycle and weak in others, largely as a function of their core competencies.
• Social Business Use Cases are business situations in which most clients find themselves; different use cases also map to different parts of the Social Business Life Cycle.

Using Results

• Guidance for Clients gives summarized guidance to executives of commercial, nonprofit, and government executives for evaluating advisory firm categories and individual firms.
• Guidance for Advisory Firms summarizes recommendations for developing a firm’s social business practice and competencies to be aligned with the market.

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Research Survey Executive Summary

Background

(UPDATE 11 Mar] I am accommodating the excellent feedback I’ve received by tweaking the structure of this Executive Summary and adding to it slightly. This will help most first-time readers to understand the rankings better.

Mission

• Educate clients and firms about the importance of social business practice in firms’ ability to guide clients’ social business-led transformation.
• Introduce metrics for social business that distinguish it from social media.
• Highlight the growing need for organizational change to unlock organizations’ value from social business.

Method

• Designed metrics to measure firms’ capabilities in advising clients on social business-led transformation of organizations.
• Created assessment workflow and use case in which a client team evaluates advisory firms for their ability to advise on social business-led transformation.
• Selected firms based on public commitment to social business as transformation.
• Applied workflow and metrics to evaluate firms’ main domains, linked social presences, and related public data.
• Analyzed data, and created Overall, Practice, and Leadership rankings.
• Interpreted rankings, and wrote advisories for clients and firms.

Definitions

• Leadership rankings show firms’ commitment as reflected by their public content.
• Practice rankings emphasize firms’ social business practices.

More

The Preview document delineates design and procedural elements of the research survey:

• Survey design explains how I designed the research survey, my method, and how it works.
• Point of View makes explicit my interpretation of how the social business transformation is developing as a practice.
• Definitions delineate fundamental concepts such as “social business” and “social media,” and Rationale explains how they are treated.

Top10 Social Business Overall Rankings

Overall scores combine Practice and Leadership scores, which are then ranked here. Due to its importance in the mission, Practice is weighted more heavily than Leadership (has more points). Overall is useful because it reflects firms’ overall investment in social business as transformation. This is important because most clients and advisory firms still practice “social” as marketing and promotion.

Dell, Forrester and Salesforce.com hold the Top3 Overall scores. The Top3 all practice social business on behalf of themselves, which is important because social business is integrated into their cultures and creates a well of potential expertise. However, that does not mean that they are effective advisors of other firms. For example, Analysts, as a firm category, are limited to addressing Feasibility and (some) Strategy parts of the Social Business Life Cycle, so Forrester, IDC and Gartner will not be relevant for most social business initiatives. Analysts produce extensive research on social business and transformation. They understand and write about organizational transformation.

Note that Pureplay firms’ strong representation here is mostly due to their strong Practice scores, while Analyst and Enterprise IT firms are largely driven by Leadership scores. The maximum possible score was 97, so the top scores fell one third short of it. Much of the Top10 barely made it halfway. There is room to grow.

The prospective client’s business context is a major determinant advisory firm rankings, and it will be discussed below in terms of social business use cases and the Social Business Life Cycle. For example, a prospect that seeks an advisor for organization change would have a different Top3 from a prospect who is just getting started. Dell is a poster child for practicing social business itself, and it has explicit “social media professional services” that currently focus on Pilot, not transformation. To Dell, “transformation” means IT spend first, which may well not be appropriate for some clients. Salesforce and Infosys have similar profiles to Dell’s—without the explicit social business consulting services.

Accenture and IBM house independent management consulting practices with deep and broad expertise, so they would be alone in the Top10 if the client needs heavy lifting in management consulting as “transformation” implies.

SideraWorks, Dachis Group and SxD (SocialxDesign) are social business Pureplay firms that were launched to help clients use social technologies to interact more meaningfully and transform. They could be top picks for clients that want to “try social business” (without transforming) because pureplays are limited in the depth and breadth of their services. In addition, Pureplays’ Practice scores are some of the best, and they are more likely to be using emerging techniques than established players, and this can be relevant to some firms’ stakeholders.

Top10 Social Business Practice Rankings

Top10 Practice reflects advisory firms’ prowess in two key areas: the maturity of their stated social business advisory services and their observed skills with using social business themselves. Its metrics are: Practice Definition, Social Business Life Cycle, Sociality, Point of View, Leader Blog, Interactivity, and Personability. These metrics quantitatively evaluate advisory firms and roll up to the Practice score.

Note that Pureplay, Enterprise IT, and Strategy firms were the dominant categories in Practice. I hypothesize that this stems from how these firms monetize their offerings: Enterprise IT is focused on pull-through of their legacy products and services; Pureplays focus on social business advice; Strategy firms understand enterprise transformation due to market change, so they perceive an opportunity to grow their business transformation services.

Dell and Dachis Group tied for #1 in Practice, with Pureplay firms Sidera and SxD hot on their heels. Forrester and Salesforce trailed further but made up the #3 score. Salesforce’s Practice ranking is artificially high because the firm has no social business transformation services; it does have a partner network that includes most of the other contestants here. It has the right point of view and messaging, and it practices social business well itself. Dell does a fantastic job of integrating customer-centric forums into its main domain, where prospective and existing clients can see them. IBM has excellent interactive blogs and forums, too, but they were not available to this research survey’s user, so they didn’t count. Pureplays had some of the best descriptions of social business-oriented transformation as well as their services to address it.

The second tier of Practice scores was led by two social business Pureplay Analyst (i.e. not management consulting) firms, Altimeter Group and Constellation Research Group. As Analyst firms, they focus on researching, interpreting and advising clients on social business transformation, but their services aren’t relevant past Strategy. They both practice social business well.

Six firms tied to take the last place in the “Top10,” which actually numbers 14 firms. Interestingly, Strategy firms McKinsey, Booz, BCG, and AT Kearney showed through their thought leadership that they understood the transformation context. This matters because they have some of the best enterprise transformation practices in the world, so they understand clients’ needs and realities like few other advisory firms do.

Edelman is the lone MAP firm (Marketing/Advertising/PR) to make the Practice Top10. Although its core business is communications, Edelman has invested early in social business as a concept and has significant thought leadership focused on transformation. Moreover, Edelman is the best practitioner of social business in its cohort. Capgemini is an Enterprise IT firm with a good mix of blog integration with its main domain, interactivity, and demonstrated understanding of social business transformation.

Top10 Social Business Leadership Rankings

Top10 Leadership shows advisory firms’ understanding of and commitment to social business transformation as reflected by its metrics of Momentum, Collaboration, Case Study, Tools, Firm Posts, and Influence. Since its metrics emphasize content and reputation, let’s observe that it scales in a “traditional” way: thought leadership and marketing. Also, I was not surprised to find that the three dominant firm categories also monetize social business most easily: Enterprise IT (legacy pull-through), Analysts (research products) and Big Four (risk management services). Pureplays are newer and far less well funded, two facts that make them weak Leadership performers.

Leadership is important for two reasons: first, these artifacts reflect organizational investment in thought leadership and outbound communication, which is an indication of commitment. Second, Leadership reflects perception of competence, but it can be a false indicator, especially in 2013. Talking about social business transformation shows that some people at the firm understand the context and some of the concepts. However, advising clients on the Social Business Life Cycle requires conceptual and hands-on expertise in Practice. Firms that rank high in Leadership and low in Practice will be limited to the early part of the Social Business Life Cycle.

Keep in mind that Leadership scales in a more traditional way: most of the Top10 are Enterprise IT and Analyst firms, with two of the Big Four muscling in. All these firms are large businesses with well funded thought leadership and marketing programs. Analysts’ core competency shows here: they are strongest in research and communications.

IBM took the #1 spot, falling only two points short of the maximum. In many ways, IBM has been the key pioneer and champion of social business for many years, so this finding was not a surprise. What did surprise was its relatively weak showing in Practice, which results from the use case. That said, the use case is valuable; it assumed the prospect had no prior knowledge of any advisory firm and judged them on a level playing field.

Accenture trailed IBM by only two points and has a sea of thought leadership on social business transformation. It lost points due to a weak showing in Practice. Accenture’s definition of “social media strategy” services was one of the best of any firm studied in terms of addressing the social business life cycle with high credibility. IBM, curiously, had a very scant definition of its services.

Analysts Forrester, Gartner and IDC are very strong in Leadership, where their core competencies shine, especially in Feasibility and some Strategy parts of the Social Business Life Cycle.

Deloitte tied IDC to make it into the #5 slot. It led the Big Four by a significant margin. Dell and Salesforce rank relatively low in Leadership, which reflects their late entry into social business as transformation. They do not have the “strategy and research” gene as prevalently as Analysts, Big Four and Strategy firms. IBM and Accenture both have large strategy firms, which enabled them to surface the social business transformation trend earlier, so they responded, and their results show it.

Infosys bears special mention because the firm has no discernible social business (or even social media) services, but it walks the walk. Its blogs are well integrated with its main domain, and consultants and partners are approachable in their interactions. They also took the medium score in the Collaboration metric, which measures how many of their people address prospects’ questions in a third party forum. I predict that Infosys will formally launch social business services in 2013.

Interpreting Results

Social Business Life Cycle

Clients’ needs for advisors is a function of the social business (adoption) life cycle (Here is a longer treatment):

1. Feasibility is a rigorous analysis of market, industry, and stakeholder adoption of social technologies as well as enterprise readiness. Usually used to baseline current state and prepare for aggressive enterprise scale social business.
2. Strategy is more granular than Feasibility. It diligences/prepares the business’s optimal plan for interacting in digital public to achieve business-relevant outcomes. It is often conducted for a brand or business. Social business strategy requires in-depth knowledge of how to measure trust, relationship, and optimal interaction. It also assesses organizational competency and recommends several Pilots.
3. Pilot tests the strategy and builds organizational competency in interacting to build relationship and achieve business goals. It features mentoring in all facets of sociality. Pilots are killed fast or mature into ongoing initiatives via iteration.
4. Scale expands pilots into larger, ongoing initiatives, and it builds social business infrastructure. Where Pilot is focused on tactical outcomes, Scale has a greater organizational context.
5. Integrate reevaluates the organization’s legacy business processes in light of social business results, so it requires deep business process and transformation expertise at the organization level.

In 2013, no advisor category addresses the entire life cycle; advisors gravitate toward one or more parts of the life cycle:

• Analysts are limited to Feasibility and minimal Strategy.
• MAP falls between Strategy and Pilot and does not fully cover any phase of the life cycle.
• Strategy and Big Four firms can cover Feasibility and much of Strategy as well as part of Integrate, but they have little/no capability in Pilot or Scale.
• Enterprise IT and Pureplays fully cover Pilot as well as part of Strategy and Scale.

Social Business Use Cases

Client use cases are crucial considerations when selecting social business advisors. Here are some common ones:

1. Fix the Fire Drill—an external event suddenly propels social business up the priority list of a business that may have social media experience. It gets embarrassed in public, a competitor has a major social media win, or a major business deal gets affected. Leadership wants to “fix it,” so it doesn’t repeat. Strong focus on Strategy and mentoring in Pilot.
2. Upgrade Social Media—the business has been practicing social media for 1-4 years and has seen promotional results but little substantial business returns. Leaders want to reevaluate their efforts before diving deeper. Requires strong focus on Strategy and mentoring in Pilot.
3. Catch the Leaders—the business has a very conservative culture, so it has avoided using public social technologies; now it worries about being left behind. It gravitates to advisors that mitigate risks while leading the firm to overtake the leaders by outperforming them across the life cycle. Strong focus on Strategy, and mentoring in Pilot and Scale.
4. Herd the Cats—leaders suddenly realize that their various businesses have diverse social media presences without much apparent direction; they want to use strategy to provide a keel that resonates with corporate strategy and brand and create a social business “center of excellence” to serve several businesses. Requires due diligence during Feasibility, strong focus on Strategy, and mentoring in Pilot and Scale.
5. Transform the Enterprise—management wants to restructure the business to boost profits, so it evaluates social technologies as a potential lever. It highlights comprehensive due diligence in Feasibility, strong focus on Strategy, mentoring in Pilot, and strong guidance in Scale & Integrate.

How use cases map to the Social Business Life Cycle:

Observations

• Fix Fire Drill and Upgrade Social Media are usually tactical; they don’t require Feasibility, but they do require Strategy and Pilot.
• Catch Leaders has a controlled sense of urgency; it aims to outperform rivals by executing better.
• Catch the Leaders, Herd the Cats, and Transform the Enterprise are more strategic, and they address more phases of the life cycle.
• Fix Fire Drill and Upgrade Social Media will eventually extend to Scale and Integrate, which are out of scope for these use cases.

Using Results

Guidance for Clients

The purpose here is to illustrate how the rankings work; each business’s circumstances are different, and the selection of an advisory firm should be made of the basis of the team it proposes rather than the firm’s name or category. That said, the probability is that category rules are true more often than not.

• The Social Business Life Cycle is the best reference point for knowing what kind of advisor you need because it’s grounded in your situation.
• When your business intends to do Pilot and Scale, consider advisors with the highest Practice rankings: Dell, Dachis, SxD, and Sidera.
• The context of Strategy varies with the use case: in Fix Fire Drill and Upgrade Social Media, it is focused on specific brand or business unit goals, and Pureplays should be strong contenders. Catch Leaders and Transform Enterprise demand more rigor, so look at IBM, McKinsey, Accenture, Booz, AT Kearney, or Deloitte.
• Remove Analysts from consideration if your business is doing Strategy or after. Forrester would be a strong choice for independent Feasibility work.
• Remove MAP agencies from consideration for most social business initiatives; with the possible exception of Edelman, they show little awareness of social business transformation, and they have low Practice rankings.
• Analysts and MAP could be relevant to any use case but would require complementary advisors.
• In 2013-2015, pioneers will have to take a “best of breed” approach and use different advisors at various parts of the life cycle, although I expect Pureplays to build capability quickly as demand grows.

Teams are most relevant to your results, so allow for exceptions to rankings; however, teams generally reflect their firms and categories.

• Use Practice metrics to study IBM, Accenture, McKinsey, AT Kearney, Dell, Deloitte, and Dachis; compare their social business services. Accenture has the best description of its social business services.
  • IBM has many presences and thought leadership on social business transformation.
  • Dell leads in integrating forums and client/customer voice into its website.
  • Deloitte has a nice mix of social business services and thought leadership, but it drops the ball in relating; this is the rule for firms, not the exception.
  • Dachis has an active blog with relevant topics and discussions.
  • AT Kearney features little social business content and no services, but leading partners show that they understand social business transformation, and they are approachable yet credible.
  • McKinsey has invested in social business thought leadership for years, and its “The Social Economy” is best in class. Read it. Thoroughly. Note the transformation argument, rationale, and call to action.
  • The Social Network Roadmap addresses the entire social business life cycle.

Also learn from firms’ weaknesses, which are indicators of their ability to serve you effectively. Most lose points because they don’t address the Social Business Life Cycle, services are scattershot, and they have few consultants/partners relating online, which detracts from their credibility. Most cling to firmspeak, which shows that the firm doesn’t understand the new environment.

• Use Leadership metrics to start your short list of firms committed to the idea of social business transformation of organizations.
  • Most firms start talking before they have much competency; however, if they aren’t even publishing blog posts, papers, services frameworks, and other tools, they aren’t in the game; let them learn with someone else.
  • Social business is about interacting online to communicate your community, priorities, and beliefs. This is how it develops relationship and preference. Therefore, firms that talk about social business and don’t show they walk the walk through their partners’ and principals’ interactions will be limited in their ability to help you.
  • Make sure to recognize the distinction between talking about social business (Leadership) and doing it (Practice). All firms have smart people who understand certain concepts; however, successful social business is based on action and understanding the many nuances of sociality. What can a firm tell you about “creating relationship” if its people can’t show they do it themselves?
• Get more in-depth advice in firm category reports, via the research survey home page. Also use the Executive Briefings as introductions to this Executive Summary; they are slide decks that introduce the key ideas here (14 slides) and available as Guidance for Clients and Guidance for Firms.
• As you may have guessed, CSRA addresses the entire Social Business Life Cycle; I invite your inquiry about the survey’s detailed reports; you can also commission a report on any firm as well in case you are considering advisors not included here. In addition, I can change the basket of metrics used to fit your goals.

How advisors and use cases map to the Social Business Life Cycle:

Guidance for Advisory Firms

Your firm is undoubtedly at some stage of evaluating social business, perhaps as a potential service offering to your clients, but certainly for your own use, and likely both. If this research survey’s philosophy and approach resonate with you, your firm can use rankings as tools for building your capabilities to address the expanding social business market while avoiding the deflating social media market.

• Study this research survey’s six reports, which analyze Strategy, Big Four, Enterprise IT, Analyst, Pureplay, and MAP firms (Marketing/Advertising/PR). Access them via the research survey home page. Read a couple of them to learn how the rankings and metrics work. Note that all include separate advice for clients and firms.
• I have repeatedly seen in client work with global firms that social business has a strong defensive aspect. Clients discover that, when they open spontaneous, continuous communication with stakeholders (examples are clients, partners, and employees), they have a better grasp of emerging market developments that affect their legacy businesses. Offensively, they can launch new offers and make legacy offers more relevant.
• Examine the Social Business Life Cycle. I have chosen it as the substrate for the research survey’s interpretation because it reflects organizations’ realities, and I serve them, as do you. What parts of the life cycle are most relevant to your firm’s core competencies and related practices? You can start and expand.
• Inventory and evaluate your partners’ and principals’ presences in social networks, forums, blogs, microblogs, and others. Who is already having substantial interactions in which s/he is having substantial interactions with others, with a professional-yet-personal demeanor? You can start with a few highly motivated people; motivation and skill counts more than position in your hierarchy.
• Although not required to start, it will be helpful for you to choose one or more leading partners as champions. Champions need not be strong social business practitioners (although that helps), but they do need to understand and commit to its value proposition to clients and your firm. One of them at least needs to be a visionary.
• Use Practice metrics as lenses through which you study IBM, Accenture, Dell, McKinsey, Deloitte, AT Kearney, and Dachis, and compare your firm to theirs in two ways: 1) how you/they use social technologies and 2) social business service offerings. All these firms have strengths and weaknesses:
  • If you dedicate the time to find them, IBM has many presences & thought leadership on social business transformation.
  • Dell leads in integrating forums and client/customer voice into its website.
  • Deloitte has a nice mix of social business services and thought leadership, but it drops the ball in relating; this is the rule for firms, not the exception.
  • Dachis has an active blog with relevant topics and discussions.
  • AT Kearney features little social business content and no services, but leading partners show that they understand social business transformation, and they are approachable yet credible.
  • McKinsey has invested in social business thought leadership for years, and its “The Social Economy” is best in class. Read it. Thoroughly. Note the transformation argument, rationale and call to action.
  • The Social Network Roadmap addresses the entire social business life cycle.
  • Learn from firms’ weaknesses. Most lose points because they don’t address the Social Business Life Cycle, services are scattershot, and they have minimal leaders relating online, which detracts from their credibility. Most cling to firmspeak, which shows that the firm doesn’t understand the new environment.
• Use Leadership metrics for guidance in how to communicate and project your point of view on social business and how you relate to adoption. Leadership should be less important to you until you have a strategy for your firm’s social business services.
  • Firms that project Leadership ahead of their ability to deliver (Practice) lose credibility with astute clients/prospects. Most firms that led the survey in Leadership had woefully scant descriptions of their social business services.
  • Practice trumps Leadership because it delivers; firms need to show their competence through their partners’ and principals’ online interactions.
  • Watch Analyst firms, especially Forrester, Constellation Research, and Altimeter. Although they do not field substantial transformation services, they understand the social business value proposition, and all use social technologies very well.
  • Leadership should be less important to you until you have a strategy for your firm’s social business services.
• I invite your inquiry about the survey or findings. You can commission a report on any firm and learn more detailed findings. I also advise firms on building practices.

Social business will eventually transform all organizations, but leaders have more choice about how it happens. Pioneers move early and set the table for laggards, who reactively get sorted out by the market.

Additional Resources

• The research survey home page contains all public artifacts, and I’ll update it with additional links and resources.
• For more detailed guidance, clients and firms can turn to firm category reports (Strategy, Big Four, Analyst, Agency, Enterprise IT, Pureplay).
• You can also commission individual firm analyses or research surveys. I advise both firms and organizations on maturing their social business practices ahead of the market. Contact me to explore.