Business Week has recently published an excellent article by Rob Hoff, The Power of Us , about social software and online community. This type of thing is always useful for consultants or anyone else trying to justify spend on online community prodcuts and services, particularly as ROI is often difficult to demonstrate. [Thanks to Many2Many for spotting this.]
Here’s an excerpt. The full article is available (no registration required) here .
“…traditional companies, from Procter & Gamble Co. (PG ) to Dow Chemical Co., are beginning to flock to the virtual commons, too. The potential benefits are enormous. If companies can open themselves up to contributions from enthusiastic customers and partners, that should help them create products and services faster, with fewer duds — and at far lower cost, with far less risk. LEGO Group uses the Net to identify and rally its most enthusiastic customers to help it design and market more effectively. Eli Lilly & Co. (LLY ), Hewlett-Packard Co. (HP ), and others are running “prediction markets” that extract collective wisdom from online crowds, which help gauge whether the government will approve a drug or how well a product will sell.
At the same time, peer power presents difficult challenges for anyone invested in the status quo. Corporations, those citadels of command-and-control, may be in for the biggest jolt. Increasingly, they will have to contend with ad hoc groups of customers who have the power to join forces online to get what they want. Indeed, customers are creating what they want themselves — designing their own software with colleagues, for instance, and declaring their opinions via blogs instead of waiting for newspapers to print their letters. “It’s the democratization of industry,” says C.K. Prahalad, a University of Michigan Stephen M. Ross School of Business professor and co-author of the 2004 book The Future of Competition: Co-Creating Unique Value with Customers. “We are seeing the emergence of an economy of the people, by the people, for the people.”