social business design

How Social Business Design Theory Improves Retention and Innovation

CEOs and entrepreneurs across the country are asking the same question: How do we engage and retain our top talent? In a recent survey, Future Workplace partnered with Beyond and found 56 percent of HR workers look to enhance their employees’ experience by investing more in staff development and training. Other companies, such as IBM, are investing in people analytics, which provide an idea of when key employees may quit. Managers then use that data to nurture those team members and encourage them to stay. While these strategies may help retain employees (and are certainly more effective than reactionary strategies), I believe the best way to enhance the employee experience and boost retention is through social business design theory.

What Is Social Business Design?

Social business design theory is a method of organizing a business around collaboration, innovation, creativity and individual leadership. It’s an ecosystem of people who share common values but are free to develop unique microcosms within the overall structure.

I’ve built my company around social business design principles, and it has kept my team responsive and agile — not to mention entrepreneurial. Our team members work in nodes, which are semi-autonomous structures similar to departments in other businesses. Co-workers in each node are encouraged to cultivate opportunities for group learning and share their knowledge with the rest of the company.

Such a setup enables us to quickly make smart, innovative decisions because we’re exchanging ideas in a collective environment, moving in sync without needing to run every idea up a chain of command. In fact, that’s been the key to my company’s success. We started as a small bookkeeping operation without a brand or a strategy. But we grew rapidly because every team member freely contributed new ideas and insights.

By celebrating initiative and innovation, we’ve empowered individuals to become leaders. Regardless of their backgrounds or skill sets, employees don’t wait for promotions or recognition to take action.

Of course, social business design doesn’t create corporate utopias. We recognize problems will occur, which is why we emphasize both communication and self-accountability. We designated individuals who serve as mediators whenever miscommunications arise, and we advocate for openness across the organization. The social business design approach creates a truly entrepreneurial, creative environment – even in a field as fact-based as accounting.

Learn how entrepreneurs and CEOs can implement and sustain this model in their own organizations:

Establish Expectations and Ground Rules

Don’t spring a new business model on employees. Tell them to expect an adjustment period, and let them know they’ll be challenged as much as they’ll be supported. Let them know you believe in them and are confident they’ll thrive under the new system, even when they face adversity.

The key to engaging employees isn’t through happy hours or game nights, but through expecting them to work hard. The top driver of employee satisfaction is “the opportunity to use skills and abilities,” according to the Society for Human Resource Management. Social business design will push people out of their comfort zones by forcing them to voice their opinions and offer new ideas.

Teach People How to Give Effective Feedback

Think of the company as a living, breathing organism and of quality communication as preventive medicine. Encourage employees to look beyond their projections and differences to understand each other’s needs. Train them in positive communication, and demonstrate what effective feedback looks like (versus what complaining and unhelpful criticism looks like). The sharper their feedback skills, the faster the business will grow and improve.

These rules apply to the leadership team as well. Zenger Folkman discovered employees of leaders who gave quality feedback were three times more engaged than those whose bosses scored in the lowest 10 percent. The latter were also three times more likely to consider leaving their companies.

Additionally, Gallup found negative feedback is better than none at all. When people feel overlooked, they become increasingly distant and are therefore at a greater risk of quitting. Make quality feedback a core value to ensure everyone feels recognized.

Forget the Corporate Jargon

Move away from vague buzzwords, and create a language that’s all your company’s own. The Institute of Leadership and Management found that most people see office jargon as “a pointless irritation,” so speak in ways that resonate with your team. A standard vernacular can also mitigate miscommunication and create a sense of unity among employees.

My team and I use words such as “nodes,” “hubs,” “incubation,” “symbiosis” and “equilibrium” to describe our structure and processes. These reflect the view that our company is an ecosystem we must tend to and nourish if the business is to grow. Consider what types of language your team members might rally around, and invite their input as you reshape key terms. The sense of being included will inspire them to take ownership of the company’s success.

Social business design invites and encourages worker participation. The more employees actively engage with their companies’ processes, the less motivated they’ll be to quit. People want to work for organizations where they feel needed and valued, and social business design achieves both.



Mathew Heggem

Modern-day Renaissance man Mathew Heggem, aka the dancing CEO, is the co-founder & CEO of SUM Innovation -- a NYC-based accounting consulting firm that helps fast-growth businesses achieve next-level finance and accounting departments.

  • Thanks for sharing this, Matthew. This theory must be something that most businesses missed out that’s why people would never stay longer – even their best ones. This model allows each member of the organization to grow and be great on their own. And you know that even if they’ll eventually leave the company, it’s time to let them go and they probably have learned so much under your wing. I think the model doesn’t ensure that no one would ever leave, but at least it ensures a higher retention rate. This is how I see the theory, Matt. Feel free to correct me if I’m wrong. :)

  • Read your article and it is simply marvelous and conveys useful tips to grow a business. Quality content still matters and you have explained of the importance of content is very useful.

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