The Social Organization

The Social Business Log Jam

Working in the social business field has become a frustrating place - the field is littered with examples and advice that should be a distraction but instead has become the focus of the market conversation. What's worse, is that the people who everyone is looking to as the innovators (and therefore experts) don't really get it either. A recent article in The Atlantic, Why the Social Media Revolution Is About to Get a Little Less Awesome, demonstrated this to me in spades. First of all, I do believe Facebook doesn't get part of the revolution that they created for the reasons I wrote about in Facebook's Black Ice. However, to then extend that logic and say that a phenomenal customer experience is antithetical to a successful business model is, well, a bit inane in my opinion.

What is wrong with Facebook, Instagram, Twitter and a raft of other social networks and the thinking behind them is that they are focused on scale, not value creation. The simple act of connecting a lot of people and then expecting value to flow from that is definitely a 'build it and they will come' mentality that from my experience does not work. Facebook is experiencing on a large scale what I caution clients about all the time on a smaller scale - building scale before you have created an environment that entices people to co-create and changes behaviors typically leads to a quick spike and then a cliff - because it looses peoples' interest.

But because of the scale, these networks have sucked the energy out of the market and distracted people into building Facebook pages and Twitter accounts but without any strategic thought around their business model, their relationships with different constituent bases and how these tools might impact the cost and returns of those relationships. So instead, organizations are paying consultants a lot of money to compare how many Twitter followers they have as compared to their competitors instead of realizing that we live in an environment of abundance and competition is no longer the yardstick by which you should be measuring yourself.

This strategic thinking is stuck in the industrial age and creating a huge log jam in the social business market. Social strategists are doing their best to stay afloat and on top of the logs but they seem to keep piling up. Instead of worrying about Facebook, Twitter, Pinterest or whatever other new social network has popped up, we should be starting our conversations with questions like:

• What unique value does your organization create, or in other words what value is core to the business?
• What value creation is outsourced or could be outsourced because it is not unique or core?
• Who do we need to help us create that value and what type of relationship with them is ideal for efficient value creation?
• What types of relationships do we have with different constituent groups today? Is there trust? Is it contextual or absolute? Would a better relationship generate more value? 
• Where do these constituent groups interact? What do they say about us when we are not in the room?
• How can we build the relationships we want to have with these different groups in the most efficient way possible?

But no one is having these conversations with executives. Instead we are telling them they should blog and when they go glassy eyed or object we try to convince them why blogging is so important. No wonder this isn't working. And yet, these same executives are the ones we need to support social business initiatives in order to really transform our organizations. And some of them, despite our best collective efforts to make this about technology, are getting it.

At The Community Roundtable, we are kicking off a new research effort called The Social Executive to try and learn from both the executives who 'get it' and actively participate themselves as well as those who object so that we can understand how to better demonstrate the strategic benefits of social business in a way that is meaningful to them. So that we can all stop talking about The Twitter and all start building real relationships with each other. That will be a relief to everyone and it will allow the rest of the world to take us seriously.

Facebook's Black Ice

We have much to thank Facebook for - it has led the way in training society how to communicate in networked environments and has shone the technology community how to optimize communications technology for engagement. But Facebook has a big issue that is growing more acute with its IPO - its business model is in direct conflict with its networked-based engagement model.

From a business model perspective, Facebook is little more than a copy of existing media models with 68.8% of its revenue coming from text and display ads. This incents them to build functionality that encourages interactivity... but that is largely where it ends. This is highly problematic for organizations that are working to re-invent how marketing and communications is done, using interest and influencers to develop pull for products and services. To change the cost structure of marketing, organizations need to help facilitate communities and with them relationships between community members so that education and information can scale out, through chains of influence. Facebook has no incentive to support this new marketing approach because it directly conflicts with their advertising-based business model. The move by GM to pull Facebook advertising (but not their presence) was fascinating to me for this reason.

I have long had a complaint about Page functionality in this regard - it does little to help a community manager welcome new 'likers', connect people to each other, curate content or carry on a topical conversation over a period of time (there are 3rd party plug-in that do a better job at this). That functionality would really help brands engage in a more involved conversation with their markets and change how they approach marketing. Instead Facebook, through its functionality, encourages brands to treat their Facebook pages as simply smaller channels that are similar to their big channels, albeit with a bit of interactivity.

On the user end, I've noticed the need for revenue growth in my stream, which is increasingly filled with page updates vs. updates from my friends. While there used to be a degree of control over my feed, that control seems to have diminished steadily. This is another huge risk for Facebook and every user will have a tipping point when they feel like Facebook has just become one large advertisement and they start to either visit less and less or they un-like Pages in an attempt to see more of what they really care about.

Finally the biggest risk that Facebook has is their networked engagement model itself. While growing, it provided a huge positive feedback loop that allowed them to grow geometrically and very, very quickly. That same dynamic can turn into a negative feedback loop as users jump ship.

Watching the Facebook story play out has made me wonder whether they really understand the changing business environment in which they themselves helped to create - or whether they do understand it but are now caught in the catch-22 of the innovators dilimma; they had to start with an advertising model because that is what corporate customers understood but now they are so dependent on the advertising model that they cannot get themselves out from under it. Either way they are increasingly treading a fine line between keeping their users engaged and providing real value to corporate clients and there are plenty of traditional corporate clients to help hold them back.

 

 

 

Decision Making in a Networked World

Social media has made the complexities of the world visible and much harder to ignore both for individuals and for organizations. And the complexities are many and everywhere as the world becomes more globally connected and transparent. For a majority of people, these complexities drive a craving for certainty because they are too big to fathom or process. This drive for certainty, in turn, creates stalemate and paralysis in group decision making which is disastrous to constructive progress. The evidence of complexity (the Wall Street crash around derivatives and mortgages, the economic melt downs in European countries, the Arab Spring, budget stalemate in the U.S.), and of the reaction to this uncertainty (the polarization of the U.S. political discussion, Al-Qaeda, the Oslo shootings) are everywhere.

So how do we move forward and how do we make decisions in this environment?

• We have to suspend the notion that we know anything definitively, like an anthropologist does when observing another culture.
• Separate out respect for individuals from opinions about their behavior or decisions. Personally for me, I find many behaviors and decisions interesting, fascinating, or funny. Some of the people I respect the most, I think do odd things but we ALL do or believe things that others see as odd.
• We have to understand that when we feel right, we may be wrong. See this TED video of Kathryn Schultz on Being Wrong - she makes a great analogy about how being wrong is like being Wylie Coyote after he runs off a cliff but before he looks down. We still feel right even when we are wrong and are not on solid footing, right up to the moment we are aware that we are actually wrong. It's an extremely dangerous place to be.
• Proactively seek out other perspectives and build counter-arguments for your position. Test your ideas with the assumption that you are wrong.
• Identify decisions you think are wrong and find cases for which those same decisions would be right.
• We need to be certain less which is a hard lesson to learn because most of us, for most of our lives have been trained and rewarded for certainty. Instead, as this HBR article Why Being Certain Means Being Wrong by Ted Cadsby recommends, take the stance that your perspectives are hypothesis and are provisionally true.
• Know that everything you believe to be true is based on your unique experiences and perspective. It is quite possible for something to be true for you and wrong for someone else. 
• Spend time learning something entirely new that is not job related. It will make you more comfortable with the feeling of uncertainty with a risk-free endeavor and that will help make you comfortable with uncertainty in more important domains.
• Because each of us individually cannot have all the experiences necessary to find the answer to complex problems, we must work in groups. Understanding older concepts of GroupThink and new concepts like collective intelligence will help create effective decision-making structures.
• Learn how to use images, art and drawing to facilitate discussions around complexity. This is one of my favorite graphic drawings about education reform.  Art allows for abmiguity and complexity in a way that text and language cannot alone.
• We need to move forward boldly and make decisions despite incomplete information... but also be prepared to change our path. It's easy to just shut down when faced with an environment in which you can never be certain or absorb all the information available. But if you are a leader, you need to accept the uncertainty and move forward anyway. 
• We need to accept that moving forward may often mean a compromise or an imperfect path, both of which will not make us 100% happy particularly if we are asked to support it.

These are some resources and strategies that I've found work for me. But, in the spirit of the point, I'm not sure I'm right. What's your take on how to make decisions in today's economic and political environment?

A big thank you to Luis Suarez from IBM who pointed me to the TED talk and the HBR article and to Nancy White for introducing me to the power of imagry in facilitation.

Image by  DanCentury

 

Communities - The New Strategic Imperative

By now most of us have a rough understanding of Moore's Law and the exponentially increase in the processing power of technology:

While this increase in technical productivity has been celebrated liberally over the years and has generated huge amonts of value and wealth, it has changed the cost structure of businesses in ways that put increasing amonts of stress on people. Unfortunately human cranial capacity does not evolve quite so fast - changing over millions of years, not hundreds:

What does that have to do with social media?  Well, networked communication channels have existed for quite a while but there usage was limited - IRC chats were typically frequented by the more technically inclined, for example. But as organizations have applied technology and their operational speed has increased, humans - not technology & tools - became the biggest limitation to innovation and productivity. With that change, individuals have become more and more stressed because their processing capacity has not evolved. My hypothesis is that social media took off when it did in large part due to the strain being put on individuals to keep up with the pace of technological change. Social media has created an immense improvement in the speed of which individuals can share information and make decisions. This is great as it reduces some of the stress on the individuals in the system.

The problem? Technical processing power will continue to increase and once everyone is social tool-enabled they will end up in the same spot where they were before - as the biggest limitation to operational speed. What then? Humans cannot go faster and faster without breaking the quality of their decision-making and judgement. So while social communications channels will persist, their value to the organizational system will plateau. For those most connected now, they are the canaries in the coal mines - completely overwhelmed by the amount of information coming at them from a myriad of communication channels.

This leads me to the conclusion that a strategy of faster will no longer be effective and, in fact, it will eventually lead you to crash and burn. What humans need and what will give an organizational competitive differentiation is the time and space to build quality products and services that are rewarded with higher margins. The way to acheive that time and space for people to do their best work is through highly trusting relationships with customers - and it is the only way. Customers must trust that by giving your company time to build a quality product or effectively support them, they will be better served.

That has some pretty broad implications. It means that to win, organizations will have to:

• Focus on building relationships first, rather than focus on the products and services first
• Educate and expose customers on internal processes so they understand and have realistic expectations of delivery
• Build in boundaries that allow individuals to slow down and focus
• Build trusted relationships with employees such that they not only don't feel pressure to go faster but are incented to make sure they are thorough and inclusive in their work

Communities are one of the few ways to scale some aspects of relationship development and building. Those companies who are ready for this next phase of operational effectiveness are busy investing in relationships today and not worrying quite as much about the short term ROI.  Those organizations too focused on the short term, transactional ROI of social media may find that they missed the boat as social media effectiveness flattens because their customers and prospects are off building deep, rich relationships elsewhere and, at the end of the day, those customers and prospects only have room for a limited number of those relationships.

It's time to fundamentally rethink how value is assessed, created and distributed and how we think about our competitive landscape.

Want to hear more about this from me? I'll be presenting these and other thoughts at the Enterprise 2.0 Conference on Tuesday, June 21st in Boston.

What do you think? Are you personally feeling stressed? Do you think your organization wants to keep its foot on the gas to the exclusion of quality? Which companies have always done this relationship piece well and have they prospered?

 

 

 

 

 

 

Women and Leadership in Technology

It's been an oft discussed issue: the lack of women in executive management positions in the technology industry. I don't really have an answer to this other than to say the industry in general has to mature a bit because the go-go-go and vaguely frat boy culture of most technology organizations makes them unappealing to lead for many women. I think, for that reason, a lot of women choose not to take part in the management of them, regardless of how well qualified they are. It's mostly a cultural, not an expertise issue from my perspective. I believe culture creates far more difficult barriers to change than anything else in organizations - and it is mostly un-articulated and not proactively considered or facilitated in so many companies.

But women are obviously in the tech industry and a recent TechCrunch article Why Women Rule the Internet really bothered me because it was quite focused on the opportunity for women in online shopping. While that is an opportunity, there is so much more - and so many more important aspects of the technology market - that women are also involved with. But the leadership challenges remain.

Having gone to one of the Seven Sister colleges what I know is that a hugely disproportionate percentage of leaders in politics and other industries are graduates of women's colleges. Women's college graduates:

• Make up 1/3rd of female board members of the Fortune 1000 
• Are twice as likely to earn Ph.Ds
• Are 20% of women in Congress

But women's college graduates only make up only about 2-4% of all women graduates. Clearly while women can receive a great education at many places, these schools do a better job at preparing women for leadership positions.

The problem with women's leadership in technology? Women's colleges like my own Alma Mater, Mount Holyoke, have been almost completely absent from the discussion despite educating Jean Sammet who helped develop FORMAC and Susan Kare who designed the first Macintosh graphics.

Traditionally, computer engineering and information technology has not been seen as a liberal arts discipline but with the advent of socially mediated technology as well and its ubiquity in everything we do, I think it is high time that women's colleges took on the challenge of educating and preparing women for leadership positions in technology. In fact, another recent TechChrunch article spoke about the need for both engineering and liberal arts backgrounds to be represented in order to build world class technical solutions and stated that only 37% of technology executives and heads of product have engineering degrees. This jives with my experience that only a portion of executives in the technology companies I've worked for come from engineering.

So where are the women's colleges in this field? Mount Holyoke, I'm looking at you.

Understanding Digital Body Language

Digital Body Language is not a new term but it is new to me. I recently heard Valeria Maltoni use it and after digging a bit more, found that it was originally a term created by Steve Woods, founder of Eloqua that referred to the anticipation of customer needs in the demand generation and lead development context which is not exactly what came to mind for me when I heard it.  However, I love the term and the idea behind it - that there are ways to infer a person's intent through how they behave online.

When I initially mentioned the term on Twitter I got a lot of 'huh?' type of responses back but after years of watching people interact online it is clear to me that you can infer quite a bit about people's unwritten intent.  How?

• When a person's cadence changes from their normal cadence when they interact with you - whether slower or faster
• When a person ignores a directed update on their Wall or in their Twitter stream
• When a person does not follow another back or friend them
• How and when someone inserts themselves into a public conversation
• How a person proactively requests connections and on which platforms.
• What and who a person RTs or shares
• How reactive and emotional individuals are (are they quick to judge or slower to respond to good/bad news?)

Relationships are in large part about the exchange of energy between two people. Relationships grow when that energy and enthusiasm is reciprocated. If it is not, one person is forcing the relationship forward despite the other person's lack of enthusiasm. Companies do that all the time. Lots of people do that all the time too. If you listen and watch carefully to both what is and what is not said, you can optimize your efforts on the people who are genuinely interested and engaged. It is both more cost effective and more fulfilling in the long run.

What signals do you watch for to determine others' intent online?

BlackFriday/CyberMonday: Sacrificing Stability for Cheap & Easy

I've noticed a disturbing trend in a lot of industries for many years - they seem to be chasing short-term wins at the expense of ensuring long-term sustainable business models and valuable brand identities.  The chicken and egg of technology and globalization have disrupted most sectors of the economy. Organizations established before this disruption are having a very, very difficult time adapting.  Instead, they respond by eating away at their value, one holiday discount at a time. My response to the frenzy of retail marketing in the last month of the year is to think that most retailers have an antiquated business model if they cannot reach profitability in the other 11 months of the year.  Not only does it suggest that the retail business model is broken but it makes those businesses very hard to operate because of the extreme seasonal volatility.

This trend is not only happening in retail - it is happening in media.  Ted Koppel recently published a rant on the death of real news and his perspective really stuck with me "This is to journalism what Bernie Madoff was to investment: He told his customers what they wanted to hear, and by the time they learned the truth, their money was gone."

The mortgage crisis is just one more example. It was cheap and easy money that everyone in the financial market knew was a house of cards but they did it anyway - and the consumers who bought the mortgages didn't stop to think either.

I see it in public companies and the stock market where day trading and automated trading has created enormous volatility and focus on the extremely short term.  A large percentage of the market is being driven by a gambling mentality rather than an investment mentality.

I see it in the cheap 6,000 sqft houses being built to last for 10 years vs. 100 - hey, as long as there is stainless steal and granite, who cares how it is built, right?

I see it in the health care debate... we don't want to pay to insure everyone but we accept that many will continue to get primary care in emergency rooms - adding unreasonable costs for everyone.

I see it in agriculture because people want cheap food but the result is less competition and lower quality because the only farms that can provide food that cheaply are huge industrialized farms.

Whether at the individual or organizational level, we no longer collectively know how to invest for the long term or why taking a financial/emotional hit now will make things easier in the future.  We seem to almost always choose the easiest and cheapest route to what we want. 

But doing hard work first has enormous benefits. It came up recently when speaking with Jamie Punishill about getting executive support for a new social initiative - it turns out, if you do the hard work of convincing your legal, regulatory, accounting, IT, and HR teams first it is much easier and quicker to get approval from business owners. Do the hard work first and everything else follows much more easily. 

Doing the hard work first also has amazing benefits when raising children, growing communities, learning, planting vegetables, creating new products, and building sustainable companies and brands. Don't take easy money, customers that are a poor fit, or advantage of employees just because you can. If you do, you will find out too late that it was a mistake.

However, the concepts of amortization and delayed gratification is not very socially acceptable these days. I'm here to tell you a secret... ok, it's not my secret... I think it is Warren Buffet's advice if I recall correctly: Buy when everyone else is selling. Sell when people want to buy. Be calm when everyone else panics.  If you follow the heard, you are too late to gain an advantage.

This holiday season, sit back with a drink by the fire while everyone else makes themselves crazy running from one store to the next. Chances are you will be healthier, wealthier, and wiser for it.

The Inextricable Link Between Social Media and Enterprise 2.0

Social media and enterprise 2.0 are largely thought of separately these days, in large part because social media primarily affects communications and relationships with constituent groups outside of the organization and enterprise 2.0 addresses collaboration and innovation behind the firewall. In reality, organizations will find that by doing one they must address the other. Why? Social technologies significantly reduce the cost of content creation, distribution and discovery, thereby significantly increasing the speed of information and value transfer. If implemented on one side of the corporate firewall but not the other, it creates an imbalance that grows quickly, increasing tension and strain felt in other parts of the organization.

In most cases, the information environment outside the organization is changing far more rapidly than the information environment internally. Customers, partners, prospects, and employees can find, access, and share information in a way that corporate infrastructure, security, culture, and policies inhibit. Organizations are having a hard time keeping up with - never mind responding to or taking advantage of - these new environments. As organization do adapt, the external environment is continuing to speed up and become more efficient at arbitraging information and value. In a particular market that means the advantages go to people and organizations that are first to see the opportunity.

If as an organization, you have built a robust social media ecosystem for marketing and customer support, but have ignored applying social and networked communications technology internally, new opportunities will be found quickly in the market only to hit a brick wall once introduced internally. On the flip side, if you've applied internal social technologies that enable rapid innovation and collaboration, but you have no external channels by which to inform your market and gather feedback rapidly, that innovation will have limited value to the organization.

Those companies that have been at this a little longer than others realize this and we are starting to see how radically it is affecting their entire enterprise - Dell, SAP, EMC, CSC and many others now understand that this is not about a Facebook or blogging strategy, it's about increasing the speed of business and increasing their competitive advantage.

It's no longer a question of if, but when. Is your organization the one hitting the gas pedal or are you still riding the brakes?

This post is cross-posted from The Community Roundtable blog.

Time to Fire Your Customer

I was as amused as everyone else by the news this morning that a JetBlue employee quit in such a spectacular fashion this morning despite also thinking he was a bit crazy to do so in the way he did.  If you haven't caught the story, see below:

The thing is - I think most of us that spend any time on planes can empathize with him.  There are always a handful of people that make the experience pretty trying and I only have to deal with them for a very small part of my time.  If I were a flight attendant I would likely go ballistic at some point too (which is part of the reason I am not... but I digress).  My real point is, there are plenty of customers that are not right - particularly in their behavior in airports and airplanes.  I think companies have as much responsibility to protect their employees as they do to protect their customers and that it is OK to very clearly set behavior expectations for customers and 'fire' them when they cannot commit to those standards. 

The real problem is that I don't see companies wanting to clearly, vocally, and regularly set those expectations - it's like they are afraid to do so for fear of customer retribution.  However, I think most customers would delight if an airline posted and regularly broadcast that if customers swear at each other or at their employees, they will be asked to get off the plane... or if they hit people with baggage... or push people.... or cut lines. As the entity creating the environment that customers experience,  ensuring that the environment creates a positive experience for everyone is part of the product and brand experience.

If a customer is creating an environment that is negatively impacting your ability to deliver a positive experience to other customers (whether directly or indirectly by creating a hostile work environment for employees), I say it's time to fire the customer.

Social Media's Pull: People Want Comfort More Than Food

We don't often like to compare ourselves to children or monkeys but the truth is that we're not that different.  As adults, we often hide our needs, desires, and disappointments but when looking to understand the behavior of adults, it is useful to watch children and animals because they have no artifice masking their instincts.  One of the most powerful and heartbreaking experiments ever done was by Harry Harlow on how baby monkeys form attachments and how important comfort was to their existence.  The video below shows that baby monkeys will take comfort over food - in effect starving themselves in order to feel OK.

I can hardly watch the video but the point is that animals and people (we're not biologically all that different after all) will choose something comforting over a more obvious need like food.  To me, this gets at the heart of why the social interactions facilitated by social media and social software can make such a big difference to the individuals that interact with organizations.  Individuals will flock to organizations that offer comfort (personalized attention) even if the 'food' - i.e. salary, product cost, partnering costs - does not make economic sense for the individual. 

For organizations, this has a couple of implications:

• Resources and time spent on effective personalized experiences with employees and customers will see the returns in the form of higher margins, lower operating costs, and increased retention rates.
• The recent conversation about applying business process and integrating 'social' into existing processes should be very carefully pursued.  If the social element becomes just as standardized as current processes, it won't have much impact.  The business processes themselves must become more flexible and adaptable to individuals which is now possible because social software reduces the cost to support that flexibility.

The issue many of us have is responding to requests to quantify how much comfort is enough. In essence, we are being asked to put a dollar amount on feelings. If you have any suggestions on how to do that, I'm all ears. In the absence of being able to do that, each organization will need to experiment (which, I'm sorry to say, will cost some money) and turn the dial up and down until they find what balance of 'comfort' and 'food' works best for them given their unique market and the unique constraints of their organization.