McIntire Hosts Conference on How Social Media Are Reshaping Business and the World

November 02, 2010

Listen to the UVA Today Radio Show report on this story by Brevy Cannon:

November 2, 2010 — For many of us, so-called social media such as Facebook are convenient ways of keeping up with friends and family, and possibly reconnecting with the occasional long-lost college roommate.

For renowned social media watchers David Kirkpatrick and John Hagel III, though, Facebook and sites like it represent profoundly powerful new forces in communication, with the potential to change everything from politics and government to media, marketing, the organization of business, and even our most fundamental notions of identity and privacy.

It was these changes that Kirkpatrick and Hagel discussed at a conference on Friday titled "The Facebook Effect and the Power of Pull: How Social Media Is Reshaping Our World." The conference was hosted by the McIntire School of Commerce's Center for the Management of Information Technology. Ryan Nelson, director of the McIntire center, called Kirkpatrick and Hagel "two of the most respected voices in today's discussion of the implications of social media and information technology."

Kirkpatrick is the former senior editor for internet and technology at Fortune magazine and recent author of "The Facebook Effect: The Inside Story of the Company That Is Connecting the World." Hagel, a noted business strategist, is the author, most recently, of "The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion." After their presentations, they answered audience questions in a panel discussion moderated by Dan Elron, managing partner for strategy and corporate development at Accenture.

Young and Restless

Facebook's dazzling future as a paradigm shifter, Kirkpatrick told the audience, is due in no small part to the keen ambition and uncanny business acumen of its founder, Mark Zuckerberg. Kirkpatrick recounted for the audience his initial skepticism upon meeting a skinny, boyish, 22-year-old Zuckerberg in 2006 – and how that skepticism melted away as soon as Zuckerberg started talking.

He not only spoke about Facebook with "a striking scope of vision and degree of confidence," Kirkpatrick said, but also, even in those early days, in "astonishingly 'big picture'" terms.

"Zuckerberg sees a world of 7 billion people, and he wants them all to use Facebook," Kirkpatrick said.

Coupled with that ambition, Kirkpatrick told the audience, is Zuckerberg's "stunning" ability to think strategically, take risks and see potential threats. The decisions to create Facebook's "newsfeed" feature, enable the sharing of photos, launch Facebook as a platform upon which other applications can run, and create Facebook's translation application, he said, are all examples of Zuckerberg's prescience and fiercely competitive nature.

"He wants to build the social network for the planet," Kirkpatrick said. "He sees the 550 million users he has now and thinks, 'That's not that impressive.'"

Big Deal

Of course, Kirkpatrick pointed out, Facebook couldn't have the revolutionary potential it does by sheer dint of its founder's ambition: It must, in some way, represent something both new and uniquely powerful. This power, Kirkpatrick said, lies in the fact that Facebook represents "the first time automation has had a place in human communication."

"Facebook looks at what you do," Kirkpatrick said. "It sees your status updates, photos, the links you've included – and decides who should see it." The result, he told the audience, is a communication system of "extraordinary viral power, allowing messages to spread with extraordinary speed."

This viral power, Kirkpatrick said, means that every individual now has the power to initiate mass communication – a fact that has already proven to have major political consequences (Kirkpatrick referenced Sarah Palin's Facebook savvy), and that will likely also have a dramatic effect in areas such as marketing and advertising. "Facebook," he told listeners, "is a platform for the empowerment of its users – that's why I wrote about it."

The Power of Pull

Hagel challenged the audience to consider the implications for business of transformative technologies such as Facebook.

Starting from the premise – supported by years of research – that American corporations have been in "sustained, significant decline" since 1965, and show no sign of improvement, Hagel asked listeners to think about what might have happened to precipitate such decline. "Something is fundamentally broken," he said, "and it's been going on for a long time."

In Hagel's view, the problem isn't simply that competition has intensified, but that it has fundamentally changed. In the 20th century, he said, business was all about "push": forecasting demand and organizing so as to deliver a given set of products to people. Now, he said, thanks to unprecedented changes in information technology, business has shifted to a "pull" paradigm, meaning it must nimbly react to the rapidly changing, diverse demands of customers.

American businesses seem to be slow in changing their institutional ways to successfully compete with their global counterparts, he said. Arguing that the most critical form of innovation today is in fact institutional innovation (rather than simply the creation of "breakthrough products or technologies"), Hagel told the audience that the global center of innovation is shifting from the United States to China and India. Institutional innovation, he said, is the "invisible form of innovation that Western CEOs really need to be looking at."

Challenges, Opportunities

Still, Hagel argued, there is hope for Western – and particularly U.S. – businesses. After 45 years of diminishing returns, Hagel said, we have the chance to live in an era of increasing returns and improved performance. The key, he said, lies in not merely recruiting talented individuals, but in cultivating and empowering them.

Similarly, he said, companies must find ways to create and unlock work-directed passion in their employees. Pointing out that passionate workers tend to be twice as connected as non-passionate workers, and that connectivity in turn leads to value creation, Hagel described the rekindling of workplace passion as "central" to the success of U.S. corporations.

"Individually, and as companies," Hagel said, "we must find ways to reintegrate passion and professionalism into our work."

— By Mary Summers