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Research: Most Companies Organize in “Hub and Spoke” Formation for Social Business

Categories: Altimeter, Social MediaPosted on November 9th, 2010

Altimeter Group is going to release a research paper on the Career Path of the Corporate Social Strategist, and this is subset data, sign up here to receive the upcoming report.  These corporate social strategists (which I’ve segmented as companies with over 1000 employees) responded to find out how they are preparing their companies for social media.  

Understand the Five Models
First, read these Five Ways how Companies Organize for Social Media, which many corporations are using as a model.

Most Corporations Organize in “Hub and Spoke” formation for Social Business

To Respond to a Corporate Wide Culture Shift, Most Form “Hub and Spoke” model.
Most companies are currently formed in the hub and spoke formation in order to respond to the corporate wide impacts that social media brings.  Secondly, 29% of companies  are formed in centralized, a formation used for maintaining control.

  • Hub and Spoke Provides Centralized Resources to Business Units. Corporations recognize that these technologies have impacted every single customer touchpoint both in and outside of the enterprise. As a result, there’s been a change within a company to respond and social media teams are evolving.  Most commonly, companies launch a centralized cross functional group (often known as a Center of Excellence) in order to serve the various business units with a common set of services, templates, software, and knowledge.  In the “Hub and Spoke” formation strategic decisions are still often made in corporate in the hub, with some guidance from the business units in the spokes.  A majority of the brands I’m working with are in this model, having recently formed their hub they are starting to coordinate and I’m brought in to help formalize the program or convince management.
  • One Size Does Not Fit All, Each Formation Serves a Different Need. While Hub and Spoke is dominant today by today’s organizations, it’s followed by the centralized model where a single unit maintains consistency over social media efforts.  We see this formation in regulated industries  such as health care, financial, pharma and some auto manufactures in order to maintain a sense of control in a coordinate fashion.  Separately, the Decentralized formation where organic programs spring up are often the sign of a lack of a centralized group, or an open culture we often see in global technology giants
  • Over Time,  Expect Companies to organize in either Dandelion Holistic Formations. Overtime, social media will permeate all areas of the corporation and we should expect that the once centralized groups will slowly fade into the background as an operational status quo. As I track this space over the coming years, expect to see more companies transfer to the Multiple Hub and Spoke, which has been dubbed by Altimeter’s Christine Tran as “Dandelion”.  In this phase, decision making about social media programs shifts to the business units and geographies in order to meet the specific needs of those communities.   Dependent on a culture of ‘customer service’ some companies may evolve to the holistic formation where thousands of employees are operating in a safe way, much like Zappos and Best Buy’s Twelpforce program.

In future blog posts, I’ll be discussing other aspects from our research, such as budgets, staffing size, organizational models over this coming next few weeks. Feel free to use this data in your slides and planning (this is Open Research), kindly just provide attribution to Altimeter Group.

Please leave a comment, I’m curious to hear how your company is forming in this space –and why.

This entry was posted on Tuesday, November 9th, 2010 at 7:44 am and is filed under Altimeter, Social Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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  • Larry Irons

    Jeremiah,

    I agree with our overall conclusion largely because I think the culture shift you mention is critical to the ability of a hub and spoke model to adapt to its ecosystem where the need to respond to exceptions to established processes poses the most challenge. I’d suggest that the most effective model for large organizations turns out to be a hybrid between the Dandelion and a Holistic topology. I say that for reasons outlined in a post of mine from a little over a year ago,
    http://skilfulminds.com/2009/07/07/social-business-design-and-multichannel-team-collaboration/

    Larry

  • http://www.fsuama.com/?p=2867 Research: Most Companies organize in “Hub and Spoke” Formation « Savvyhua

    [...] View full post on Top Social Media Minds [...]

  • Richard Brasser

    The basic challenge of integrating social strategies within larger corporate infrastructures is that the typical hierarchical structure of employees doesn't fit the dynamic nature of social communications. Much like the challenges faced when eCommerce became mainstream, the social strategy teams need to move effortlessly across silos and business units to maximize the effectiveness. Another analogy that fits is the struggle that traditional military structures face when challenged by a decentralized system of cells. The “dandelion” structure is key as social communications becomes a non-negotiable part of all factions of a corporation both internal and external. Social communications is not a tactic, it is empowered dialogue that permeates all facets of the organization. The key is to quickly navigate the appropriate training, education and policies to mitigate risk without squelching the conversation. Our organization has a clear hierarchical structure for accountability with multiple dandelions for communication.

  • http://web-strategist.com/blog Jeremiah Owyang

    Excellent Richard, thank you for sharing.

    To be clear, these models transcend the traditional org model, companies organize this way on top of the existing org chart.

  • http://twitter.com/JamieGrenney Jamie Grenney

    At Salesforce we operate out of a hub and spoke model. We did the Social Media Audit with Jeremiah this summer which is a great exercise to understand how effective that hub is and which business units are engaged in the social strategy. You’ll find that some spokes are stronger than others, but you want to get to the point where marketing, pr, products, sales, support, and hr are all aligned around the social media policy, coordinating their efforts, using common platforms, and sharing best practices.

    In the next year we’ll likely move to a multiple hub model spurred by growth in international markets. Because of language, culture, and the different networks that exist in region it will probably make sense to add hubs. To be effective, each hub requires a social strategist and a community manager, so the resource commitment can add up. It’s an important investment though given the dramatic growth of these channels and the rise of the social customer.

    Great research Jeremiah. We look forward to the Social Strategist report later this week.

  • http://invisibleinkdigital.com Invisibleinkdigital

    Another thought provoking post Jeremy.

    Do you envisage a paradigm shift away from the hub and spoke model you spoke about? Given that the velocity of information is exponentially increasing should corporate infrastructures shift away from some such rigid thinking?

  • http://web-strategist.com/blog Jeremiah Owyang

    Thanks Jamie, really appreciate the kind words. It's rare that the spokes are at all equal in size.

  • http://web-strategist.com/blog Jeremiah Owyang

    Look for this in two particular departments: silos are being closed down as customers are focusing support and marketing to connect to each other rapidly –this wasn't always the case in organizations.

  • Dotjenna

    I am working with an organization with 250 franchises nationwide to develop a social media strategy, this article is very helpful to me in determining the best foundation for the roll-out. I'm blogging about this article, as well as a few others you've written related to this one. Thanks!

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    Wow! What a great reply!

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    This a bunch of bullshit hype….

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