Image via Best Design Options by Vector Portal.

We don’t build the tools first. We build with what we have, and out of that which is constructed, new tools become possible. The technologies enabled by the industrial revolution led to the creation of the technological age, which in turn led on to the information revolution, which segued into the digital age. We now have the social media revolution. Like the preceding ages and revolutions, social media is going to affect every aspect, if it is not already, of our lives – including the way we do business.

Corporations are instruments of commerce. For the times when they came to the fore, they were necessary entities which were needed to source, manufacture and distribute goods and commodities, and they did it very effectively. I say “for the times” because as the times will change, so will corporations. The will have to – if they want to survive.

Although existing as legal entities from the late 19th century, they came to the fore in the post-WW2 boom. This was because of the immense cadre of (pretty much all) men who came back from the war. Before the war, the US had a standing army of less than 140,000 personnel which expanded dramatically at the outbreak of hostilities. The educated new recruits were given the task as officers and NCOs to manage this huge expansion which took place in the framework of the ultimate command-and-control environment – the military.

Peace came and suddenly American big business was blessed with tens and tens of thousands of highly trained men extremely well versed in the system of top-down management. Their talents and skills were immediately put to work, and because of who they were, the circumstances of their learning and the lessons they derived, the modern corporation came into being. It worked well in contrast to what was before and it worked well for fifty or sixty odd years.

Since most of us have grown up in a world of corporations, we tend to think of the corporate entity as a permanent fixture in our lives. In fact, it is a very recent addition to the field of human activity and there is no reason at all to assume that it will last another fifty years. And it won’t, because with the advent of social media, everything is going to change and is in fact already doing so. Consider the following principles – transparency, trust and engagement – these are the three foundations of the social media world.

• Transparency: Companies can no longer close their glass doors on the world. Even without access to privileged information, one can have a very good sense of what a company is about just from its online presence – but just as importantly, from the online presence of its customers and those with a passing interest.
• Trust: One of the major features of a command-and-control mentality is that communication flows in only one constricted way – downwards through channels. Any variance from this narrow path brings up permission issues: who can talk to who about what. It may have worked from a structural point of view, but the cost in alienation, isolation and disempowerment of the individuals in the ‘chain’ doesn’t compensate for the gains anymore. The ensuing culture of micro-management is the exact opposite of trust creation.
• Engagement: The great joy of social media is the immense ability it gives you to engage with people and groups as you please to whatever level you please. Again a corporation with one monolithic image or brand with which it portrays itself to the world is automatically demanding that a person should subsume their own ideas and thoughts to the company message. With such an inauthentic starting point it is going to be impossible for people to make genuine connections with other people.

A young person growing up now in a social media environment and who knows nothing else is going to take one look at the corporate world and genuinely wonder: “Is this for me?” A very accurate observation they will be entitled to make is: “I can’t be open, because I am not trusted to engage with people as I see fit.” Corporations are not going to get the best talent from the next generation because – as they stand at the moment with an opaque, paranoid, control freak style of human transaction – they are clearly a very unappealing proposition.

If corporations want to survive they will have to change nearly everything about the way they deal with the people who work for them and because it will be a social media world that we are coming into – everybody else too. They will have to trust their employees more to make all sorts of decisions. If a person on one team is needed on another team and he or she okays it with the folks in their present team, then what is to stop them from walking down the corridor to be where they are most needed. This doesn’t happen now, but imagine the savings in energy and time by foregoing all the meetings and paperwork and politicking just to make this one decision which goes on now. We all know it does. That’s just one example.

The irony is that if corporations do choose survival, they will survive as something entirely different from what they are today.