'Cut & paste personality syndrome now a business'

Soumitra Dutta, dean, Samuel Curtis Johnson Graduate School of Management at Cornell University, sees companies the world over struggling to innovate and catch up with the “e-ruptive” power of social media.

Dutta, who has co-authored two books, one on social media (Throwing Sheep in the Boardroom: How Online Social Networking Will Transform Your Life, Work and World) and another on innovation (Innovating at the Top: How Global CEOs Drive Innovation for Growth and Profit), talks to Nupur Anand about the complex world of social media and on why the best companies are failing to innovate. Edited excerpts:

You have been emphasising the power of social media. Why are companies struggling to adopt it?
Companies use social media platforms to brainstorm online about any strategic initiative, to reach out to people or for any ground work regarding some new market. It is also being used for learning to get some instant market feedback.

But beneath the use of social media are a few key principles that a company has to get used to. For instance, social media allows more transparency. This requires a culture that is more transparent. You also need more interactivity... So, a company has to be more transparent, real time, interactive and global. And these are big changes that a company needs to make to effectively use social media.

In your book, you mentioned the e-ruptive power of social media. Can you explain?
When you have social media, the number is so big that changes are quite dramatic and significant. For instance, a bank in America introduced a fee for its debit card and a girl wrote on www.change.org that “the fee is terrible and the bank should stop it or else I will return my card”. And in less than a week, 400,000 people agreed with her and commented. As a result, the bank withdrew the charges. That is the power I am talking about.

At an individual level, social media has also given rise to issues like identity theft...
That’s true. In fact, the whole cut and paste personality syndrome is becoming a business now. This is because you get a chance to create an identity quickly and the norm of trust is yet to develop online. Let me give you an example. Recently, a very famous football player in America kept talking about his girlfriend  for three months and it was discovered later to be a fake Facebook identity. The struggle here is that that technology is moving faster than what our society can regulate and more than the government is capable of understanding and regulating.

Does this mean it is giving rise to an alternative industry?
Yes, absolutely. You can buy friends on Facebook and followers on Twitter and there is a market emerging for all this. If technology becomes more important, it will become difficult to find out if you are talking to a machine or an actual person.

Moving to innovation, how would you rate India?
India can do better. If you look at the world of technology, Indian IT companies very successfully innovated when they redesigned the global delivery model and said that for software development, it does not require a software engineer to be sitting next to the client. TCS started this and Infosys, Wipro and everyone else followed suit.

So, there were good innovations in the first generation and now it has become way lesser. For instance, people are going to cloud, apps and there is no Indian player to think of there. If India was the leader in these technology services, this would have been a natural progression.

Is lack of investments a reason for this?
Yes, India is not investing enough. Investment in R&D is less than 0.5% of GDP and in developed countries like US and Europe it is 3%, in Finland and Sweden 4% and the highest is around 5%, in Israel.