Platt Perspective on Business and Technology

Leveraging social media in gorilla and viral marketing as great business equalizers: a reconsideration of business disintermediation and from multiple perspectives 1

Posted in social networking and business, strategy and planning by Timothy Platt on May 20, 2017

Two of the most powerful and at the same time tritely used terms in the “new” economy of the social media-driven interactive online business experience are “disintermediation” and “frictionless.” Both are often and even commonly misused and without explicit consideration as to what they mean operationally, or of even what they can mean. But at the same time, both of those terms at least point toward very real and fundamental truths and towards very real sources of opportunity. My goal for this posting is begin to at least briefly delve into this dichotomy of promise and expectation on the one side, and of actual realizable value on the other, from the perspective of business simplification in its many forms.

When I cite “social media in gorilla and viral marketing” in the title of this posting, I refer to market facing disintermediation processes that a business can enter into. I will directly consider that side to disintermediation as a whole in what follows, but I will do so in a larger business structure and function context as well, and with consideration of processes such as table of organization flattening as well. And I begin that discussion at a more generally inclusive, overall business organization level, addressing disintermediation as it might be pursued in a variety of contexts.

More specifically, I begin here with how disintermediation can and does create positive value, as for example for smaller businesses and ones just starting out, or for established businesses in need of fundamental change. There is in fact real meaning, or at least real potentially for it, when a term such as disintermediation is invoked, and certainly when specific applications of it such as viral marketing are considered. I begin here with the fundamentals:

• When disintermediation means cutting out extra, excess cost-center layers in an organization and its functioning,
• That hold potential for becoming, or that already have come to serve more as performance restricting barriers between functional areas within a business,
• Or between those businesses and their customers in their target markets,
• Or between them and their partner businesses in their supply chains,
• Or in any combination thereof,
• This streamlining and simplification can reduce or even eliminate a whole range of possible step-by-step operational mark-up costs that would otherwise have to be carried.
• This type of impediment and barrier removing disintermediation holds potential for speeding up internal business processes, sales and supply chain processes and essentially any and every other aspect of the organization that can become hindered by dysfunctional table of organization and functional requirements complexity. This can, if planned for and carried out effectively, make an organization more agile and better capable of meeting its immediate, real-time needs,
• And it reduces information sharing failures and the business systems friction that that creates.
• Bottom line, under the conditions as just outlined here, disintermediation can make a business stronger and more competitive in its industry and in its markets.
• And when this is taken as an automatic and axiomatically presumed outcome of any such organizational simplification, that is when reasonable and realistic and focused-upon in the above bullet points, can veer off into the realm of hype and comforting fiction.

The cumulative end result of all of the above bullet points, and certainly for all but the last of them, is that even a small but nimble, effectively connected enterprise can compete with a large and diverse corporation, at least in its area of business and market-facing strength, and on an essentially even footing with them for capturing market share and profitability. I write what follows with that in mind, and with the caveat of a last bullet point to the above list in mind too.

Here, to pick up on the specific disintermediation steps cited in the title to this posting: gorilla marketing and its marketplace-sourced viral marketing cousin, this means a business directly reaching out to and connecting with its marketplace and generally through development of two-way conversations where that business listens at least as much as it speaks, in order to make sure that when it does speak, it conveys the right message and in the right way and to the right audience and through the right channels. This means they’re not going through intermediate marketing or marketing data provider levels to learn about and respond to market interests and needs, to do so directly and creatively and in many respects at low or no direct cost.

• That briefly stated understanding of disintermediation, and of how it can at least reduce friction and create greater agility in this market facing context,
• Represents the truth behind what can become the hype, and certainly when business systems simplification is carried out within the framework of an ongoing strategic vision and understanding, and within an ongoing strategically considered operational plan.
• Here, ill-considered and ad hoc and a lack of analytical follow-through to track actual results, lead to simplification as hype by way of comparison.

And that set of points at least opens the door to the possibility of how disintermediation per se, and simplification for the sake of simplification can also come to mean creating seemingly-simpler but very real inefficiencies in a business too, and even new sources of inefficiency for it and certainly if the streamlining processes carried out that lead to specific disintermediation steps are not effectively thought through and executed.

Ultimately, what I am writing about here is not structural and organizational simplification per se, though that is a big part of this posting’s goal and purpose. This posting and others to follow it as a new series are also only partly about developing best practices for mapping out and carrying out the right simplification steps: the right disintermediations and in the right ways. I primarily address that set of issues elsewhere in this blog. See, for example, my series: Intentional Management for a more in-depth discussion of that (as can be found at Business Strategy and Operations – 3 and its Page 4 continuation, postings 472 and loosely following.)

My goal here is one of thinking through what organizational layers and systems actually are and both as a matter of structure per se as would be represented on a table of organization, and as a matter of business function and how that is parsed and distributed throughout the organization. It is about knowing what might best be maintained or even expanded upon, or simplified or done away with and where, and it is about knowing when layers and structures in place in a business and its systems provide value and reduce risk, and when they simply add costs and potential for increased risk.

I have been discussing this set of issues in fairly abstract terms up to here. But I will continue from this foundational starting point in a next series installment, by offering two admittedly cartoon-like business model caricatures. In anticipation of that next installment to come, I acknowledge up-front that while both are very realistic and describe actual businesses and business approaches actually pursued, both also fit into and support what might be considered the at least potentially hype-end of the spectrum for thinking about disintermediation too. And I add that both case study stereotypes consider wide ranges of specific forms that disintermediation can take (e.g. removing management layers and flattening table of organizations, but also reaching out directly and creatively to the market and its end-users for what a business offers and with a goal of “eliminating the middleman” in both arenas.)

The two scenarios that I will at least briefly explore are:

• A new, young, small startup that seeks to leverage its liquidity and other assets available as creatively and effectively as possible, and from its day one when it is just starting to develop the basic template that it would scale up from,
• And a larger, established business that has become at least somewhat complacent and somewhat sclerotic in the process, and with holdover systems and organizational process flows that might not reflect current actual needs or opportunities faced.

I am also going to continue on from this to identify and challenge some of the tacit and more usually unstated types of assumptions that usually arise in these types of examples and that I will start from too. And I will pursue that reanalysis as a means of more fully analyzing what the general process of disintermediation actually entails, and what its specific market-facing applications of social media-driven gorilla and viral marketing actually do and can mean, as well as what its more internal-to-the-business applications mean and entail.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. You can find this and related postings at Social Networking and Business 2, and also see that directory’s Page 1.

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