The face of capitalism as we know it may soon change and established businesses may be replaced by innovative companies – all thanks to social media.
That is according to Gartner concluding from its new Maverick research.
“While capitalism won’t collapse, there are fundamental changes under way as it morphs to a new form that is more in tune with the technology and attitudes of the 21st century,” Gartner’s Nigel Rayner says.
“The coming capitalist era is that of the Facebook generation, in which the values and behaviors that pervade the Internet and social media will also be adopted by innovative and disruptive businesses. With half the world’s population under the age of 25, this may happen sooner than many think,” the research vice president at Gartner added.
What the research firm suggests is that established businesses need to look out for “social capitalists” who will leverage the power of social media to threaten their business models.
“Social capitalist” businesses are “innovative organizations [that] will use capitalism going social to create new business models and disrupt their industries,” Rayner said.
In a bold prediction, Gartner says that “social capitalist” companies will be the most admired companies in the next 10 years.
It adds, however, that not every enterprise can adapt a “social capitalist” model.
Nonetheless, leaders of businesses must understand the impact of these changes on their industries and organizations, and ensure that their business and IT plans have the appropriate focus on social media technologies, the research firm said.
These key position-holders also need to identify if current management practices in their organizations should be changed to capitalize on their drive to become more social.
What Gartner believes will be one of the most significant use of social and mobile technologies for companies in this changing landscape is “to change the way it interacts with the 99 percent, bringing them inside the four walls of the enterprise to become part of the organization’s processes, rather than keeping it at arm’s length.”
According to the firm, businesses can very much leverage social technologies to increase employee engagement and trust if businesses use these technologies to augment ways employees can openly communicate and participate in decision making.
“This approach is based on the premise that engaged, motivated and empowered employees will deliver better customer service and value,” Gartner said.
As such, the research firm also predicted what main changes will happen to capitalism as businesses become more social. It says:
- Businesses will move away from the hierarchical command-and-control model to a more democratic and meritocratic model. Employees will be judged (and granted decision rights) on the basis of their impact on and value to the community, rather than on job title, age or social background.
- Businesses will adopt a more open approach to decision making, allowing anyone in the organization, and also people outside the organization, to have input into the decision-making process. Goals and objectives will be set by socializing strategic aims with employees, shareholders and communities of interest.
- Social and mobile technologies will be used to build and manage two-way relationships between businesses and all their communities of interest. This use of technology will go way beyond the one-way, outward-looking, limited use of social media today. It really will bring the 99 percent inside the walls of the enterprise to become part of the organization.
However, Rayner says that these predications won’t necessarily “impact all industries and businesses in the same way.”
“Some will use them to create incremental business opportunities, but others may find their business model directly threatened, because they are seen by the 99 percent as the worst cases of exploitative business practices,” he adds.
“Capitalism going social is a reflection of the wider societal changes that are happening in the 21st century. These changes cannot be ignored, although their impact will vary by industry and organization. IT and business leaders must identify how soon their industries and companies will be affected by these changes,” he continued.
“Ideally they should seek out a senior executive in the organization that faces the greatest threat from capitalism going social who will be a strong ally. Once this person is on board, they should use the IT department to trial social technologies, and use the results of these experiments to advocate wider adoption across the organization,” he concluded.