Pretzel Logic – Social and Collaborative Business

A significant portion of my work over the last decade (both as part of the marchFIRST/ Mitchell Madison team and later, my own practice) has been in the area of accelerating performance for business partner networks at large organizations.

As is always the case, one of the outcomes of this economic downturn is going to be massive M&A activity and industry restructuring. Just in the last week, we saw Dell and Perot Systems, and now Xerox and ACS tying the knot. My own experience with this was my consulting work during McKesson + HBOC, Sun + StorageTek mergers and recently, a $1B+ communications service provider entering the SMB market via acquisition, amongst others.

The Effect on Traditional Partnerships

One of the most prominent pressure points in the midst of such consolidation is the partner ecosystem. New partners get added, existing partners face conflicts of interest and a sudden expertise/knowhow gap vis a vie the new combined offering. In the case of the channel in particular, the end customer (really the partners customer) looks to the partner for clarity on the manufacturing organizations new standing in the market.

Add to this some of the timeless struggles in this ecosystem that are prevalent in any economy. As a manufacturer of physical or soft goods (say Insurance), you’re always trying to attract the top 20% of your channels sales reps as a way to get the largest share of wallet of that partner. But so are your competitors. So the onus is on you to make it dead simple for your channel to understand and communicate the benefits of your products to the end customer. As important, the ease of doing business with you (which includes partner on-boarding, provisioning, co-marketing, white labeling, first line of support etc) is a big factor for channel sales reps that are going to represent you in the market. I’ve even seen first hand in the SMB channel for large organizations that partners will even give up as much as 10% of margin in exchange for low frictional end customer management and ongoing administration. The difference is more than made up by freed up time to drive up sales volume. All up, simplicity of doing business is paramount.

Organizations are But a Matrix of Internal Partnerships Too

Then there’s another side to this: My work experience has proven that organizations that do well understand that even internally they are really orchestrating a matrix of complex partnerships. Sales with Marketing; Product Development with Marketing, R&D with engineering etc., where each of these tend to work in extremely different ways. To be successful, you need to understand the unique dynamics of this relationship that make for a solid partnership that can ultimately drive the business forward. Outside of internal team collaboration (say, a group of marketers, a group of engineers, etc.), no spray & pray / general purpose employee collaborative strategy (or tool application) is going to really show sustainable impact for every tribe or collective. And just like traditional business ecosystem partnerships (customers, suppliers, channel), these internal partnerships also get significantly rattled in the face of industry consolidation.

Critical Considerations for Social Computing

In principle, social computing constructs afford a significant opportunity to first bring back normalcy to these partnerships at a rapid pace and then accelerate performance well beyond the original baseline – by driving simplicity. Basic constructs such as people and data findability and crossing siloed org designs are important first steps. And these can be made possible with a deliberate strategy and today’s “e2.0’ tools.

Its critical to note though, that these efforts alone likely won’t account for context, incentive and performance driven collaboration preferences – elements that generate tangible business value and participation. And so the true promise from social computing constructs and investment to cultivate these partnerships will be eventually be questioned if the following are not dealt with, head on:

• First, existing structural inefficiencies in how internal or external partners liaise as a result of little adherence to basic human interaction constructs and incentive structures, and unnecessary process centric technology that restricts human capital flow. Examples: Restrictive ECM processes that bring massive risk to business execution or latency and artificial walls in the communication process with supply partners that result in massive lost opportunity to recast the concept of collaboration across the extended business ecosystem.
• Second, neglect of critical early programmatic design considerations that truly accelerate performance via social computing or ‘Enterprise 2.0’ concepts. The results of this will manifest itself during the hangover period following pre-mature/euphoric technology-led change initiation in the enterprise. Examples of “fall outs” will be misconstrued outcomes from Attention optimization (see v. good post by Jevon MacDonald on this), a rudderless rush towards the ‘real time enterprise’ vs. ‘right time’ considerations, mis-alignment between strategy and ‘enterprise 2.0’ deployments. Or the side effects of heightened transparency as a result of open knowledge models (As Oliver Marks eloquently opines).

The business case of socially networked business ecosystems must include solutions and antidotes to these two fundamental issues to gain long term value – whether that’s competitive advantage, cost savings or revenue enhancement. Smart line of business executives will demand it upfront, catch on early post kick off or worse, just ignore the initiative whole hog. They are acutely aware of the failed promise of portals and extranets as the one size fits partnership facilitation solutions to large scale ecosystem integration. So this time around they will want to be convinced that you can bring simplicity, contextual interaction, design around standard performance metrics – yet shield participants from the needed complex technology that’s behind the scenes.

Got Tech?

One thing’s for sure: The socially powered business partner ecosystem will not emerge from what we know of to be the ‘Enterprise 2.0’ technology stack, as it stands today. No doubt that the current tools will play a significant role towards simplifying these relationships. But to accelerate business performance via social computing constructs, lots of design work is needed along with the filling of critical technology gaps to truly account for context, cognizance of both process and social at the business activity level, and a deep understanding of and response to individual incentive that makes participation a natural instinct.

At the Enterprise 2.0 conference in San Francisco, Oliver Marks and I will be running a new track called “Selling the Business Case for Accelerating Business Performance with Enterprise Collaboration and 2.0 Technologies”. Via a combination of instructional and practitioner panel discussions, we’re going to tackle how known functions in the organization such as Customer Support, Purpose Driven Employee Collaboration and Supplier Networks can leverage social computing constructs to accelerate performance. There’s a need for a unified social fabric across business ecosystems, yet a deliberate focus on the unique motivations for each business interaction is vital. We aim to bring it all together at the conference. More details about the track from Oliver and from E2.0 Conference Chair, Steve Wylie.

Last week, I had the opportunity to review a draft of The Guide to Online Community Management, published by the ReadWriteWeb team and edited by Marshall Kirkpatrick. Simply put, if you’re planning or considering a community effort at your organization, this is a must have. The report provides answers to any “ifs, ands & buts” with regard to the strategic importance of community engagement.

Most readers of this blog come from larger organizations. I’ve kept that audience in mind when reviewing this report.

Overall Impressions

To be honest, about 15% into the report, I struggled with the idea of buying a premium report that was largely peppered with quotes from articles that I’ve read before. However, as I kept reading, it became clear that report does a great job of identifying major trends, challenges and opportunities emanating from specific community efforts, backed by rich and sometimes opposing expert opinion. What you end up with is a set of succinct recommendations that organizations can consider and evaluate in the context of their own business objectives.  Should you publish a blog? Should you invest in a Facebook or a Twitter presence? Should you hire a full time or part time community manager? How to guarantee that your community efforts will fail? The pros and cons are nicely laid out for you, complete with real word experiences from practitioners, consultants and vendors. All of this to help with not just planning, but also practical execution.

On to specific areas that really resonated with me…..

Addressing ROI – Head On

I was quite surprised to see so many consultants and vendors either advise against quantifiable return or set a tragically low bar for success measurement. Thankfully, the unrelenting focus on ROI in this report clearly shows how community based engagement can be justified at large organizations. Ultimately, in my opinion, it boils down to whether you have the tenacity to attach the value of community management to specific business activity or not. What the report does well is to contrast and highlight examples of both approaches that enterprises can learn from and apply accordingly. Citing scores of case studies from companies such as Zappos, Dell, and WholeFoods, enterprises should be able to quickly identify what types of community efforts make sense for their business, and market place in general.

“The Morning After”

Since a good chunk of my work centers on execution planning, I was especially thrilled to see a sub section within the ROI discussion that was devoted to life after launch. As important, stakeholder expectations that need to be set with respect to ongoing operational requirements, changes in the customer engagement dynamics and new opportunities that emerge from maintaining a thriving community. For instance, on the issue of getting disillusioned because only a fraction of registered users regularly interact, Rubicon Consulting Principal, Michael Mace advises:

Managing a community is hard work and labor intensive. The report cites detailed case studies on how to beat the odds. For instance, Ex-Microsoft SharePoint Manager, Lawrence Liu (now at Telligent Systems) realized that the cost per incident was 90% lower when it was dealt with in the community forum as opposed to commercial phone support. With that in hand, he goes on to illustrate how he leveraged his success with the enthusiast community to create a business case for more dedicated in-house community support:

In terms of execution, the report also details useful how-to’s on topics such as hiring rock star community managers, establishing required resource commitments to ensure community health and sharing insights with relevant constituencies in the organization about what prospect and users want. Some of this is probably after-the-fact ROI, since you don’t know what direction the discussion will take until its’ had some time to gestate. The take away is that that once you get started, your list of benefits and value proposition for the community can continue to grow, beyond what you initially planned for.

Ancillary benefits that Community Managers can deliver across the organization

Beyond ROI that’s tied to the intended use case, the report discusses how other departments can gain from community efforts such as customer led innovation, recruiting, and awareness and research in the areas of marketing. Forrester Research Social Media Analyst Jeremiah Owyang says:

There’s some valuable discussion about how to generate leads in the context of B2B from community efforts, but this is an area where I believe that the report could have challenged interviewees even more. You’ll see some great examples at the end of the report about how sales reps engage on Twitter and surface qualified leads through conversations. But are two hours on Twitter more productive than say 5 qualified cold calls? Maybe; maybe not.

The end game

Overall, the only major component that’s missing for me is a deeper view into what a community managers’ career (and the programs they create) can look like in years to come. As new paradigm shifts in how to accelerate business performance emerge, there’s usually 3 phases to deliver lasting value:

Experiment > Operationalize > Institutionalize

This report has the first 2 phases covered. Experimentation is self explanatory and the report showcases some very effective emergent models. Operationalizing involves setting up a central command post that can incubate and manage these new work models as they bloom (much like what Dell has achieved, also covered in the report). Finally, institutionalizing requires that you get off the side lines, go to where process-laden, structured activities live, and improve, integrate with or take–out these inefficient forms of working. That’s where it can get truly transformational, towards an Enterprise 2.0 design. Business process management via ERP achieved this at larger organizations. In contrast, knowledge management largely failed at infiltrating each business activity and becoming institutionalized. How will the community function turn out and what are the risks that may cause it to fizzle? The good news is that we are beginning to see DNA-changing progress, primarily in the area of community based support. Helpstream is one company that’s leading the charge on this.

From a career standpoint I’ve always felt that today’s brightest community manager’s will not grow into VPs/CXO of Community or Social Media, etc. Rather, the very best ones will actually take over as leaders in charge of primary business functions such as Brand, Marketing, Customer Support etc. The catalyst will be successfully making relationships (not process) central to driving awareness, innovation, lead generation, support, and the like. This report confirms that hypothesis.

All that said, what the ReadWriteWeb team has done is brilliantly articulate how you can start and operationalize vibrant communities. And that’s what most enterprises are pondering, today.

The RWW Community Management Aggregator

Finally, this report is like the gift that keeps on giving. To respond to the dynamic nature of best practices as well as technology innovation, this report comes with a portal called the “The RWW Community Management Aggregator”. This important utility will keep subscribers up to date on the latest news, thought leaders and case studies in this space to make sure you are listening in the right places.

I fully expect that in the near future, this news aggregator will begin to surface insight into how to institutionalize community engagement in the context of specific lines of business activity.

Congratulations to the folks at RWW. Get a taste or buy the report here.

More reviews on the report here:

Jason Falls: ReadWriteWeb’s Guide To Online Community Management A Must Have For Businesses

Dawn Foster: ReadWriteWeb Guide to Online Community Management

Beth Canter:  Newsmastering for Professional Development 2.0 Dashboard

Google Trends is one tool that I put to work fairly often in my consulting work. Last week I decided to benchmark some of the concepts we hear a lot about in the area of Enterprise 2.0 (KM, Portals, SharePoint) and others that we should be paying attention to (business activities such as Lead Generation, HR, Supply Chain Management, etc). The idea was to see how current Enterprise 2.0 search traffic and news volume fares against these concepts.

Search phrases are subject to human interpretation and Google’s magic algorithms. However, Google’s advertising business is built on the premise that search is a very good measure of current interest and intent. And I’m piggybacking on that in the analysis below.

What I found wasn’t flattering, to say the least.  Here goes:

1. The mindshare is steadily fixed on older incarnations of communication and collaborative mediums

• If KM and portals are what we, in the social computing arena, consider to be older, inefficient communication and collaboration mechanisms, well, that’s still where the attention firmly sits.

2. Enterprise 2.0 nemesis, a.k.a Microsoft SharePoint, continues to dominate mindshare

For good or bad, a good number of Enterprise 2.0 vendors are focused on obliterating SharePoint. So have they been successful in making a dent in the current mindshare commanded by SharePoint?

• Not the case. I wasn’t expecting to see E2.0 having caught up with SharePoint, but since the 2006 coining of the term by Stuart Eccles, and subsequent evangelism by then Harvard Business School Professor Andrew MacAfee, you would have expected at least the start of an upward trend.

3. Business activities have at least 5 times more mindshare when compared to Enterprise 2.0

Finally, in line with most posts on this blog, I went a step further to see how Enterprise 2.0 compares against a representative set of business activities and pain points, faced by most organizations. I wasn’t expecting a break through here to be honest, rather I wanted to see how far away the E2.0 mindshare really was relative to business activity:

• Customer Satisfaction, the closet in terms of search volume was still approximately 5 times more popular when compared to Enterprise 2.0; Business intelligence is the furthest away.

Some thoughts on why this is the case and where we need to go from here….

Enterprise 2.0 is plagued by tactical value propositions

The focus needs to move away from replacing email and document sharing to say, competing more effectively by better serving partners and customers. Or shrinking the distance between sales and prospects. Or accelerating product innovation by extending a hand to your supply chain. And on and on.

Over on the FastForward blog, Jevon MacDonald wrote a great post on understanding and defining Enterprise 2.0, IMO, correctly stating that we need to differentiate between Social Strategy and Social Software. Jevon is spot on when he says that there’s a need for a more strategic framework to institutionalize socially enabled business processes.

At a more tactical level, positioning internal Enterprise 2.0 solutions as more efficient incarnations of general purpose Intranets may not be an effective approach for internal champions to sell social software to executives. In my experience, general purpose Portals/Intranets, often E2.0 predecessors, have in fact not been that silver bullet in the enterprise that was meant to remedy information overload, fragmented data access or inefficient communication. That’s partly due to them being general in purpose and lacking in activity focus.

SharePoint is easy to sell

Setting SharePoint as a target is again merely a tactical step to transforming an organization. However since so many vendors are focused on this, it bares discussion.

Sometimes I wonder if it‘s precisely the structured process put forth by SharePoint that actually made it easy to define and sell, up the food chain. After buying into multi million dollar ERP systems that strictly enforced workflow and control, structured ERP might be the perfect trampoline to justify structured SharePoint. SharePoint becomes the process-enforced file management and document sharing system across the enterprise to compliment process centric finance, HR, inventory management and the other 20 ERP-driven business activities.

For more color on this topic, follow this great discussion thread about SharePoint / Enterprise 2.0 recently, by the likes of Mike Gotta, Michael Sampson, Todd Stephens, Oliver Marks, Dion Hinchcliffe and James Dellow.

Lack of/minimal association with pain points

As I’ve previously written, too much of the Enterprise 2.0 talk takes place in a vacuum. I wish more solutions were aimed at fixing focused inefficiencies in business activity, brought about by those very ERP systems.

We need to stop patting ourselves on the back for small isolated gains that were never intended to go big and remove the high viscosity that plagues many business processes today. I’m an advocate of starting small (depending on the circumstances) for proof of concept purposes but small absolutely should not mean insignificant. Start with a very important use case where the pain is high and the benefits can be huge (a large account, a flagship product, whatever) and then scale out. Too often, starting small is equated with starting where it doesn’t matter.

We, the bloggers…

I’m looking in the mirror as well when I rate Enterprise 2.0 marketing. I share the stage with plenty of other bloggers and consultants who diligently opine on the subject of Enterprise 2.0. Yet, there’s a clear need to provide additional torque to effectively raise awareness to the level it deserves. My personal belief is that this can be done by celebrating institutionalized success but also by setting a higher bar and calling out timid implementations that won’t really move the needle.

There’s plenty of visionary speak going on at the 100 thousand foot level. Most recently, Cisco CTO, Padmasree Warrior (on Twitter) wrote an inspiring post predicting amongst other things, that ‘Collaboration Networks’ will be to the Enterprise, what Social Networks are to consumers. Other terms such as ‘Social Business’ and ‘Social Business Software’ are often used to describe the new design of organizational behavior. These concepts are pertinent to board room and executive level introductions but very little is said about how to change the organizational DNA to make this happen. To be clear, I believe these visionary benchmarks are extremely important to ignite wholesale change and I’m even currently involved in such discussions with senior executives at very large organizations. But more guidance needs to be provided to managers who will take the necessary steps to institutionalize this change. That’s where strategic case studies will emerge to fuel the news cycle.

I’m looking forward to discussing this at the Enterprise 2.0 conference in Boston this summer and really talking execution, which is my focus. By execution I don’t mean only how to drive adoption for a wiki or employee social network. I mean how to also change organizational behavior to capitalize on an Enterprise 2.0 design which may well include wikis, micro-messaging tools, etc.

I’ve seen over and over again that smart business leaders who give you the time to discuss a bolder better strategy, will want to hear about how it can be successfully executed. So we need to be ready to address that from the get go.

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Over on the Enterprise 2.0 Blog, Venkatesh Rao of the Xerox Innovation Group makes a compelling case that “there is no such thing as culture change”. He goes on to list five ways to get out of the culture change argument, summarized below:

• Culture change naturally takes place because “nay-sayers retire or die out and get replaced by others. Resistance ceases because the resisters leave, and because the adopters are younger and are clearly producing more value using their ideas.”
• Inefficient or more difficult user experiences that make the transition from old to new more difficult.
• Careful alignment of incentives for those moving from old to new systems.
• Given that “people self-select into cultures containing people they want to be socially connected with” make HR needs to compete to hire those that are likely to fit into the culture your trying to grow into.
• Start at the periphery of inefficient processes and systems. In other words, start circling injured systems and be ready to step in when they cease to exist.

Noted consultant and ReadWriteWeb blogger, Susan Scrupski puts forth the most compelling rebuttal in the comments:

The 2.0 philosophies of openness, sharing, flattened hierarchies, emergent outcomes, transparency and unfettered collaboration are anathema to nearly 100% of the large organizations I’ve encountered in my zeal to evangelize e2.0.

Realistic roadblocks are presented by management with invested power/influence, governance (regulation) and legal concerns, and yes, the 9x factor that McAfee pointed out early on, which you’ve also alluded to. I do agree with you regarding the user experience and likelihood of adoption, however.

A command and control corporate culture that spawns fear, protectionism, and paranoia will never be a good candidate for e2.0. When we say it’s more about the people than the technology, this is what we’re referring to. The technology is liberating, but unless every vested member in the org chart is willing to be freed from industrial age convention, it’s unlikely change will come soon. These are corporate culture issues and they’re pervasive in the adoption story. I covered this in a post about a year ago on ITSinsider.

So whose wrong and whose right? Can you overcome the culture argument if you follow Venkats’ antidotes? Or is Susan pouring a solid dose of reality on what happens when the decision makers get in a room together.

They’re both right. From a macro, organization wide perspective, both buyers and sellers of the social computing promise will need to address and respond to shifts in the organization that Venkat brings up. Likewise, as Susan correctly says, fill a room with LOB executives, HR and IT and sell them on using software that makes the organization social, and you’re going to see some serious push back for all of the legitimate reasons she enlists.

The problem (and opportunity) here is the underlying premise:

Collaboration, Wikis, social networking or some other form of social computing technology is positioned as a better way to work, discover, save costs, etc. LOB Executives, HR and IT get in a room and try to ascertain the opportunity and risks of company wide adoption. They may reach different conclusions but you can pretty much guarantee that the weakest link (read: parts of the organization where culture can in fact be a serious impediment) will get extrapolated to estimate enterprise wide success or failure.

The most simple culture busting argument IMO is focusing on how social computing exponentially accelerates individual business activity. Prove that you can accelerate performance in a particular area and few decision makers are going to care if the execution involves social computing, hula hoops or whatever else.

So what’s required to tactically execute the justification of a social computing transformation and busting the dreaded culture roadblock? There’s obviously a few approaches but this one has worked for me. Heads Up: This is somewhat of a long story so please bear with me as I set the context and result.

The Backdrop – A primer on Hi Tech Partner (SI) Sales

I’ve been facilitating a strategy session with the EVP of Global Marketing of a F500 Hi-tech technology provider and his direct reports.

The organization depends heavily on the System Integrator (SI) partner ecosystem to push product. If you’re not familiar with the channel business, a good number of technology providers rely on SIs to reach their target market. It’s the SI that often gets the RFP from prospects and it’s up to them to propose the necessary strategy and technology solutions required to solve a problem. For those technology vendors that want to get their technology solutions on an SI’s proposal, the onus is on them to not only provide product details but to also provide all the supporting proof points that shows how their solution is in fact better than that of their competitors.

It’s a bit of a cynical statement but after conducting needs assessments for well over a 120 channel sales reps, partner development managers and LOB channel execs at different clients (as a precursor to design, sourcing and ‘operationalizing’ of collaborative extranets), the general consensus I’ve seen is that the vendor has to back fill strategic technology thought leadership elements of the SIs proposal. The more perceived/real commoditized nature of your offering, the higher the chances that the SI picks the provider that makes it easiest for them to improve the probability of sale. What’s more, it’s the SI who’s regularly playing golf with the CXO at the customer and formally pitching or informally educating the customer on what’s hot and what’s not in the evolving technology landscape. So as a technology provider, you better make it dead simple for the SI to have access to the latest information, proof points, reference architectures, experts and so on. Reliable and timely data and expert access is as much of a competitive advantage as is the long string of product differentiators you can cook up.

The Social Computing Context

Back to the client discussion. We investigated a seemingly crazy hypothesis that there needs to be a way for the technology vendor to provide a guarantee to SI partners that all supporting product documentation and access to known and unknown subject matter experts (SME) will be made available either in real time or one communication instance away. No hunting within stale portals, partner directories or extranets, emailing account teams, risking reliance on outdated pre sales material, or chasing the account manager for the answer to time sensitive questions. Convince the partner that if the data and resources come from this technology provider, its legit.

We agreed on primary pain points in the SI partner collaboration process, folded in anecdotal field data and got partners to chime in on an optimal collaboration model. We then came up with a blueprint of the what the new interaction model needs to look like to successfully grow their share of partner wallet.

It was about 70% into the process that we really started talking about the required mix of technologies needed, to realize such a business objective. Low and behold, the resulting recommendations for collaborative, micro-messaging and alerting architecture, candidate solutions providers and operational design centered around so called Enterprise 2.0 solutions. But no one really cared what label was slapped on to this ‘nirvana’ after-state.

By the time the words “culture”, “risk”, “feasibility” and “switching cost” came up, they were well into identifying which partners to approach for a very contained pilot. At this stage, the impediments I list above were not seen as deal breakers, rather, as obstacles that needed to be addressed. Think about it: What new program, whether timid or bold, doesn’t have obstacles? This was no different. Clearly identified participant incentives, the attractive cost structure of social software and business value, provided the necessary chutzpah to take this on.

Stowe Boyd said it well on his Open Enterprise 2009 panel at the Web 2.0 Expo. My re-tweet on Twitter here:

It’s a huge disservice to the promise of social computing when you’re advocating the software and not the benefit. The best case outcome is an average benefit emerges across the organization. The worst case is the you encounter the risk of individual department-centric apprehensions getting blown up and being presented as organizational wide toll gates.

So is culture a serious issue? Yes, it can be. In fact when you consider enterprise wide deployments, culture could be a much larger issue for E2.0 software when compared to ERP and CRM roll outs of the late 1990s. The latter was far more expensive but wasn’t dependent on the network effects that E2.0 so desperately needs to be a success. But by focusing on pointed business acceleration opportunities, culture can be turned into a hurdle that you can systematically glide over, as opposed to a brick wall that you slam into.

I’m sure enterprises, customer success teams from social software vendors and consultants are sitting on some really good experiences. If you have successfully glided past the culture discussion (or hit the proverbial brick wall), pipe in, in the comments.