"What do people in business need to know about social media?" In Here Comes Everybody: The Power of Organizing Without Organizations Clay Shirky describes the early days of new forms of group action and how they are going to affect every part of society in the not-so-distant-future. One of the places where the influence of these new groups will be felt strongest will be on business. His book is a first attempt at answering the question.

Here’s Shirky’s thesis in a nutshell: Businesses need to know that the old ways of dealing with customers are disappearing into the nostalgic past. In today’s world, it’s not enough to send out a message like “buy my product” and sit back and take orders. Internet technologies allow customers to coordinate their actions in groups, and this brings new opportunities (and threats).

The old model of engaging with customers involved two modes -- mass media (advertising) and personal interaction. In the mass media mode, messages are sent out using print, radio, and television more-or-less blindly targeting a broad range of potential customers. (Actually, targeting is something of a science, that isn’t blind, it’s just one-way and doesn’t provide companies with much feedback.) These messages are sent out to as many members of a targeted type in hopes of affecting the behavior of individuals. Mass media is expensive, and it's a rare group that can marshal the resources to respond to companies with mass media campaigns.

CRM allows an en masse approach to personalize communication. Which is great, but customers increasingly are expecting actually personalized interactions. And if they don’t get what they want, it’s easier and easier for customers to group together and make themselves heard. Social computing technologies and social media enable customers to participate spontaneously in groups. And these groups can form and dissolve quickly in response to their interests or needs because the cost of forming a group is just about zero. Moreover in social media, most messages flow from member to member within these groups, rather than from one central point like a business or an authority like the news media.

Shirky observes that there is both opportunity and threat in this environment. The opportunity is to engage these groups (often through social media) so that they amplify your message or help improve your product. The challenge is that these groups have a mind of their own, and are not easily manipulated. The threat is that the group might go its own way contrary to your intentions and despite your strategy.

Still, Shirky is optimistic: “The good news is that both the opportunities and the threats rely on the same underlying change, the rise of media that is accessible to amateurs and ideal for group action. Understanding this change is the key to avoiding the threats and taking advantage of the opportunities.”