Pretzel Logic – Social and Collaborative Business

Tom Friedman had a good article up in the Sunday Review Section of the Times in late December on the implications of “the merger of globalization and the Information Technology revolution”. The crux of his reasoning and conclusions lies in this quote:

The days of leading countries or companies via a one-way conversation are over,” says Dov Seidman, the C.E.O. of LRN and the author of the book “How.” “The old system of ‘command and control’ — using carrots and sticks — to exert power over people is fast being replaced by ‘connect and collaborate’ — to generate power through people.” Leaders and managers cannot just impose their will, adds Seidman. “Now you have to have a two-way conversation that connects deeply with your citizens or customers or employees.

Netflix had a one-way conversation about raising prices with its customers, who instantly self-organized; some 800,000 bolted, and the stock plunged. Bank of America had a one-way conversation about charging a $5 fee on debit cards, and its customers forced the global bank to reverse itself and apologize. Putin thought he had power over his people and could impose whatever he wanted and is now being forced into a conversation to justify staying in power. Coca-Cola repackaged its flagship soft drink in white cans for the holidays. But an outcry of “blasphemy” from consumers forced Coke to switch back from white cans to red cans in a week. Last year, Gap ditched its new logo after a week of online backlash by customers.

Tom calls it a problem of one way conversations. He’s spot on. And he cites kerfuffles that many of us are all too familiar with.

This morning, I dipped into the Social Business Atlanta Summit twitter stream, organized by the super smart Brent Leary. I encourage you to take a look at the hashtag on Twitter but this comment made by GetSatisfaction Executive Jeff Nolan and syndicated by Paul Greenberg (both fellow Enterprise Irregulars), stuck with me:

@pgreenbe: #socialbizatl @jeffnolan in last 30 yrs, customers were tangential to the process; now they are at the core of it all”

So how do you have a two way conversation as Tom suggests and move customers to the core, as Jeff says?

You do it by being connected to your customers in the public forum and on your customer communities, of course. But also making sure that your employees and partners are as wired internally to collaborate across the entire engagement chain. The kinds of pickles that Tom describes above emanated from different spark points across the organization. Sometimes the root cause is in marketing, other times its a product design issue and other times it could be a logistics problems. All these constituencies need to be connected to the customer and to each other if were going to get anywhere close to a two way conversational model and putting their needs “at the core of it all”.

Neither that two way conversation nor customer centricity will come from your traditional ERP or HR or CRM systems, alone. It comes from having a collaborative fabric (and social software) that transcends the work done in your process systems and data served by your performance and analytics systems by connecting people who are silo’d by a functional organizational design. Today’s customer expects us to break old notions of front and back office, or primary and support activities made famous by Michael Porter’s value chain framework that most large organizations subscribe to. SuperVALU is doing it, Toshiba is doing it, Target is doing it, Spotify and WebTrends are doing it. The list goes on.

To be clear, I’m not advocating that you throw these process systems out. They are your systems of record. I’m saying you need to cut through them with people engagement layers.

Coca Cola didn’t turn the cans from red to white because they were bored – they thought the customer would like it. But they didn’t tap the network effectively to test their hypothesis. Similarly, Bank of America probably thought that 5 bucks, the price of a morning venti Mocha, won’t matter. It did and the jokes on them for not testing the idea first which is dead simple in todays socially networked customer world.

As executives trying to understand what information flow and people connectivity in the 21st century means means to you and your organizational performance objectives, its the very concepts around social and collaborative approaches that become the central design theme for such-directional connectivity to keep your employees, customers and partners in synchronicity.

I’m not a fan of overtly revolutionary / FUD’ish tones on why you will be forced to embrace social and collaborative ways of work. True – it sometimes takes catastrophes to give us the needed kick in the rear to change how we organize and share.  9/11 was one such catastrophe that made governments re-think how they share intelligence. And for many Heads of State and politicians, WikiLeaks was another that also led to design change. But it doesn’t have to be so. Get ahead of it and start understanding how traditional process technology has shackled knowledge, data and content into silos and how simple engagement platforms can free the best talent up, to rally around business objectives and customer needs.

The snafus that Tom describes occurred not because of the social web. But Tom’s post supports the notion that the customer / purveyor contract has changed thanks to the social web which gives prospects and customers organized power to voice opinion and that we need to adapt accordingly.

His list of public, and even market-moving failures above, will sadly remain a dynamic one. So enhance your process-laden one way communication at customers, with conversation synchronicity across customers, partners and employees so you’re not in his sequel post any time soon.

Comments rolling in on Google Plus, here.

Information Week contributing editor Lenny Liebmann and I had a chat at IBM’s Lotusphere 2012 / IBMConnect event in Orlando last week.

Lenny wanted to dig deeper into Social Business and get into the ‘why’s’ and ‘how’s’. We talked about a decisive approach to connecting customers, employees and partners and covered a number of topics including:

• The implications of todays increasingly social, vocal social customer on business and why Social CRM matters to customers and to the sales enablement process.
• Why building and connecting vibrant employee and partner engagement networks is imperative to get customer relationship management in the 21st century, right.
• How analytics will play a role.
• And finally, how organizations can get started.

Conversations with Industry Innovators Series with Lenny Liebmann.

TechCrunch quotes a warning of sorts by Venture Capitalist Josh Kopelman who basically says 2012 will be more like a correcting 2008, as opposed to a euphoric 2011. Lots of good for and against arguments on the VC investing front by the likes of Dave McClure and others in the comments on TC.

Regardless of who is right, I’m optimistic on the enterprise front.

In 2003, in the midst of the dot bust, I founded a consulting firm that had a singular value proposition. Work with CIOs and LOB leaders at large organizations to help them with a specific strand of operational efficiency. The idea was to capitalize on two realities:

1) Whilst budgets were nose diving, the long list of performance objectives that kept executives up at night showed no signed of dissipating.

2) The blank checks during the preceding dot com boom days meant lots of purchased technology was now sporting cobwebs on CDs in a drawer under a sys admins desk or in data centers.

So we set out to do two things: 1) Bring in the right business and technology strategy muscle that could help sales and marketing, HR leaders and CIOs understand how to do more with less and 2) once operational efficiency and performance objects were set, scour the basements and attics for procured technology that could best facilitate realizing critical revenue and optimizing objectives.

Customers got to do more with less and without antagonizing the CAPEX Gestapo, in exchange for a reasonable services spend. And our lean structure consisting of very available strategists, marketeers, designers and technology architects meant we made out like bandits.

But it was much harder then. Systems didn’t talk to each other easily, data came from a plethora of external and internal systems and immature offshore development was the only way to afford execution skills. You had to prioritize what you could afford and given the cost and difficulty you could only take on a few things. And by the time portals, customer support and channel extranets went live, the requirements changed. But you did the best with what you had. And smart customer executives always find a way to ‘make it happen’ come hell or high water.

If 2012 looks more like 2008 for executives looking for opportunities to get operationally efficient, I’m even more optimistic than I was in 2003. I’ll cover this in my year end post in detail but a couple of quick reasons why:

• The plethora of cloud based systems means you don’t have to make incumbent technology do unnatural things. Chances are very good that there’s a OpEx-enabled technology solution that’s designed to solve precisely the problem you have. Every single system of record has either a cloud based forklift solution available, or a powerful add-on that helps you to keep the ball moving forward at a palatable cost. Even on-premise purveyors such as Oracle and SAP are going to offer cloud based off-shoots.
• APIs for most systems were dismal back then. More systems are built with integration in mind from the get go than ever before. And the likes of SolutionSet or Appirio would be happy to integrate your gnarly on premise File Management system with say Jive or Tibbr or Chatter in the cloud.
• Sources of competitive, customer and market intelligence is much less intermediated, now. Back then, we had to go to brokers (HarteHanks, Factiva, etc) to get lead, customer, competitive insight. Today that data sits at the edge, either available directly via the firehouse from say Yelp or Twitter, crowd sourced from a band of enthusiastic customers by say Spigit, aggregated and process-ized by GetSatisfaction or Assistly, or crunched by the likes of InsideView, The Dachis Group Social Business Index Service or Radian6 (based on the use case).

There’s many many more but you get the idea.  Fundamentally, this adds up to radically more approachable access to both sources of insight and the platforms that enable them.

It’s also important to note that the stakes are higher this time. In the 2003 post-crash world, relatively speaking, we were still serving the same pre-crash customer persona. Sure, we saw the likes of Amazon eat into brick and mortar commerce. But not at the scale that were witnessing at this time. Whether 2012 looks like 2008 or 2011, this market has some unique characteristics that demand that organizations can’t sit it out when it comes to specific trends that will impact who wins and who loses in the next few decades. Broadly speaking:

1. The customer contract has changed, forever. A prospect or customer’s expectations of how we engage and service her is now wildly different thanks to the social web. This requires a change in not just how we work at the edges (sales, marketing, support) but also depends on how nimble we are as organizations to rally employees, partners and suppliers around the prospects cause at hand.

2. I still remember the CEO of one of the largest spirits distributors sitting across the table and literally shaking at the idea this his business could get easily “Amazoned”. If Amazon was a threat to Barnes and Noble in 2000, imagine what the world looks like when I can walk into a BestBuy, scan a bar code on a SKU, have Amazon send me the best price online and proceed towards the exit. That’s a frightfully more radical scenario in any economy, good or bad. Service starts to become much more important if price arbitrage starts to become a thing of the past. Coined by Get Satisfaction, “Customer Service is the new Marketing” starts to become more of a striking reality.

3. Building on the Amazon / Best Buy example, a location aware mobile-first interaction with your business means that the lines are blurred between brick and mortar and digital for the foreseeable future. Fry’s Electronics here in Palo Alto gave me a discount when I showed them a lower price at Amazon on my mobile device. If the market is going to take a step back, you need to understand these dynamics so you can widen your customer footprint as much as you can. That means both find prospects wherever they are hiding but also have access to your best talent at all times to service this more demanding potential buyer.

This might sound like FUD but it’s not. Its an opportunity to understand and then react to a changing market. Same thing you’ve done as executives in down turns and customer shifts in the past. But more practical to do this time and in a way that won’t make your CFO reach for the antacid.

All of this makes me optimistic for the near term future of our industry. On one hand, it’s going to be more important to keep moving the ball foreword in 2012. But the mechanisms to do that thanks to easier interoperability, comprehensive availability of cloud based application services that looks like the longest Chinese restaurant menu you’ve ever seen, and finally, unfiltered visibility into what a prospect and customer expects from us has never been clearer. This results in a much more efficient approach to deciding where to spend dollars that really really matter. Note, I didn’t say easy. I’m saying necessary yet, much easier.

That to me is optimism not only to keep the lights on in a presumably tough 2012 but also to set the foundation for what competing means way beyond the living embers from this coming forest fire.

Chalk this up to another example of why Marketing STILL doesn’t get social.

Social Times reports that the way to get more “Likes” on Facebook is to offer coupons to satiate the what’s-in-it-for-me hunger of an increasingly discriminating social networker.

This might well be that moment in social media marketing history when we look back and say – “what were we thinking??”

I quote:

A recent survey conducted by Ad Age/Ipsos Observer finds that coupons are the number one reason consumers “like” brands on Facebook.

We’ve all seen the popularity of daily deal sites like Groupon, but it turns out that good ol’ retail coupons are a great incentive for Faebook users to “like” a business page. The findings of the survey make sense: Facebook users are not typically willing to share their information and their network with just anyone, but it seems they’re more willing to do so if they get something in return

Basically, entice your visitors to ‘Like’ your business page by throwing them a discount coupon.

Look, I’m a big believer in in-bound marketing on the social web, done right. I’ve gained tremendously from it in my own work. It’s opened gigantic doors for me to communicate and sell the promise of social and collaborative business as a way to accelerate performance. But increasingly there’s data emerging about the hype that is social media marketing from a lead generation standpoint. And this kind of stuff just adds to the exuberance.

I never thought I would do a whole post on a single social networking gesture but this is about the larger issue of not getting sucked into the social vortex without careful thought and resource implications.

A ‘Like’, simply, is designed to imply that I like your product. In marketing lingo, that is supposed to mean that I’m at minimum an unqualified interested party, and sends a message back that I might be a candidate to move up the engagement funnel or spiral or what have you. And ultimately towards a pre-defined call-to-action.

Throw in a coupon and you’re playing with allegiances now. Sure, your ‘Likes’ will go up but does that really translate to likes? Or was it just for the coupon? Seems like nothing’s lost but is it worth the time of your marketing and sales teams to deal with the scores of follow-ups? This looks like a knock off of trade show marketing where we are duped into believing that 1000 interested prospects came to our booth where in reality 700 just wanted to drop their business card in the till for a chance to win an iPad2.

In traditional marketing this may fly as the cost and effort to send out a 1000 follow up emails is minimal. To do in-bound marketing right, you need to engage and the manual nature of this gets really expensive when you do more enticing to attract unqualified buyers. That ends up in your organization topping off marketing with even more marketing.

Get off the treadmill. Make sure you’re not marketing your marketing.

Heads Up: Being the weekend and all, I’ve taken the liberty of straying from enterprise-y stuff in this post.

There’s some excellent analysis on Google Plus out there. Even Twitter investor, Fred Wilson is rooting for a successful outcome and Chris Brogan has done a really good job summarizing every conceivable benefit. For me personally, Google Plus is a combination of Friendfeed, group messaging such as Beluga or Groupin, and Delicious. All absolutely indispensable social interaction metaphors for me. So I’m thrilled its here.

There’s also a lot of good commentary on the value of  Google Plus for the Enterprise from folks whose reasoning I respect. Personally, I don’t see Google doing this in any intentional way. Google really needs to get it’s act together on the consumer social web to protect it’s advertising turf and adapt it to the social web. Employee collaboration is far more nuanced and purpose driven for Circles to be all the rage, as is. Instead, expect existing Social Software companies to clone Plus features as they have done with Quora, Facebook Like and Activity Streams, etc. That said, small businesses will adapt Google Plus ad hoc.

On to what the consumer web and marketing departments expect….

Does Circles represent win/win/win here?

Chris Carfi lists solid customer touch point value propositions for Circles including Demand and Lead Gen, Marketing, Co Creation, etc., and I see Google paying attention to these way before thinking about enterprise collaboration. And Developers are starting to think this through as well.

Three constituencies need to be satisfied to make Google Plus a success:

• A unique value proposition to participants such as you and me
• Marketers trying to reach and engage with you and me
• A scalable social advertising model for Google and its Shareholders.

There’s no question that the monetization opportunity for Google is huge. What’s simple +Circles to you and me can be the gift that keeps on giving to Google Adsense. They have us by the tender parts when it comes to monitoring our search. Now they get a shot at showing ads based on our self declared social and professional interests and unlike search, for as long as the conversation continues. Add that to the existing interest profile that Google already has on us based on our private emails, calendars, searches and maps and you get a sense of the larger picture.

But I really do wonder how Google+ will mushroom in the way it needs to, in order to attain critical mass. To do that it needs to understand the certain level of good and bad narcissism that exists on the social web. Whether we like it or not, the I/Me/Myself web plays a big role in the social web. Many abuse it by incessantly talking about themselves. But many also use it wisely by providing great information.

Thwarting Broadcast

The most successful use case for Twitter has actually been broadcast, not social. And it seems to be working. Whilst we might complain that Oprah, with her 6 million+ followers, breaks the spirit of social networking by following back only 33 people, its also important to note that 5.99999 million people happily follow here without any expectation that she will follow back. The question is, will Oprah or Proctor and Gamble, or Joe Biden get the same level of reach if conversations get fragmented inside Circles? What came in via one giant stream exposed to everyone (Twitter or Facebook Fan pages), now gets partitioned inside folders. To a large degree the network effect of creating engagement is significantly harder. Google Plus can do a lot to address this (Make Circles sharable for instance) but theres no question that those very blabber mouths that keep the majority of eye balls on social content are going to need some level of loud speaking capability to move the conversation over to Google Plus.

The In-bound Marketing Battleground

Some brands have done an excellent job of embracing inbound marketing to build trust – the kind where meaningful content is offered to generate discussion instead of spray and pray advertising and email marketing. Analytics company Kiss Metrics’ use of Twitter is a cornerstone example of how to do in-bound marketing.

The social web has been characterized by the 90-9-1 rule thus far where 90% are lurkers who are a large and extremely important constituency that gain information from source content as well as the conversations created by the remaining 10%. While they may not speak up, marketers can hardly afford to ignore them. With conversations fragmented, on one hand you can argue that the net volume of conversations each lurker sees will get reduced. On the other hand, they may see fewer conversations but more meaningful ones that matter to them. Better for them, better for brands looking for qualified leads from social conversations, and of course, better for Google’s targeting. But the question still remains: in-bound marketing relies on a large volume base to start with before honing in on qualified conversations; can Circles offer this facility? Of course Google can, but I don’t think the design today considers this strongly enough.

Dirty Interest Graphs

The first iteration of the social web was based around Places (think Geo Cities). The recent incarnation of the social web progressed from Places to People and saw exponential scale almost instantly (Facebook and MySpace). Circles on the other hand is less about places and people – its segmentation by our interests. But is it really?

Circles are messy in practical terms My first reaction when I signed on was "Great – I can break out my wider contact base into meaningful chunks”. Then I tried and failed for the most part. The thing is we have multiple conversations with each person. Take R ‘Ray’ Wang for instance: An insightful fellow enterprise tinkerer but also one of my most trusted sources when it comes to restaurant recommendations. I can’t really segment what Ray says and so the idea that my circles represent my segmented interests is not really accurate. Google needs to use its algorithmic magic to let me separate Ray’s discussions so my stream quality is preserved. Hard to do of course but really, price of entry for any social network that wants my mindshare for yet another tsumani of use generated content. Not  much of a concern for Google as it knows behavioral targeting, but as participants, we might lose patience if our circles can’t keep conversations separate.

———

One thing is for sure: For most users, there ‘s little to no room left for yet another general purpose social network and so Google needs to displace an existing property for many users by providing (as Hutch Carpenter describes) exponential value beyond easy and clever design which it has accomplished in my opinion.

Can Google Plus pass the good/bad narcissism litmus test? It can but I think the first iteration of design hasn’t really worked out all the kinks when it comes to balancing our niche interests (currently drowned out by fire hose social design)  with a sometimes terrible but important reality of the social web – successful federation of loud mouths, good or bad. The sooner they have this sorted out, the better their chances of realizing large scale participant and marketer transition.

As I said above, the early adopter in me is sold on the promise and I’m hooked. I think Google Plus can re-cast the definition of Social Networking all together. Now Google Plus needs to really deliver.

Update: Some comments popping up on where else but Google Plus, here. Blog comment syncing is another P1 feature Google needs to take on.

About this time last year, I threw out a prediction that in 2010 Telcos will get into the Enterprise 2.0 business by bundling social software solutions for the SMB space. In December of 2009, I said:

Telcos will start looking at picking up affordable SaaS Enterprise 2.0 suites. Why? As mindshare starts to get split between Email and Microblogging/Activity streams, telcos and CSPs that offer white label business email hosting for the SMB market will see these as a natural extension. In the SMB market, standalone solutions are key to allow for simple, cheap distribution directly as well as via small reseller partners that don’t want service and customization headaches. E2.0 SaaS offerings meet those criteria. In addition they offer ready plug ins into other popular SMB apps such as SalesForce for those that want integration.

That could mean a huge buyer market outside of the traditional enterprise players who seem to prefer build as opposed to buy scenarios (Salesforce Chatter, TIBCO Tibbr, SharePoint 2010, SAP Constellation, etc).

If I’m somewhat correct, expect the likes of British Telecom, Singtel and Comcast etc jump in. If I’m very right and my commoditization assessment from last year holds true, we’ll see more players such as RackSpace and XO communications start to pay attention as well.

Fast forward to November and it looks like I was on target albeit by the skin of my teeth. Cisco Systems, the makers of Cisco Quad, announced a hosted SMB solution for their existing Telco channel to distribute. Says Murali Sitaram, VP at Cisco who oversees the collaboration business:

"We think our telecom partners over time will have the opportunity to deliver full services using our products." Murali Sitaram, the Cisco vice president in charge of Quad, told me in a recent interview. "So [that can include] cloud-based, or private cloud based or hosted services for our customers, using the range of UC and collaboration components we have."

Where I expected that a telco will have made an acquisition by now, this move by Cisco puts the products in the hands of Telcos to resell. Don’t be surprised if this triggers a few large telcos to acquire social software technology and keep the entire spread. Most of what an SMB requires is basic social software functionality and most likely, that can be attained at a commodity price. Whilst we’ve seen over and over again that larger companies continue to chose the build over buy route (Novell, NetSuite and Epicor for example) when it comes to social software solutions, there is an argument to be made for the IP that’s gone into building scalable and purpose driven experiences by the more mature start ups (relatively speaking).

Looking at 2011….

It’s only November but since Starbucks in the US has already started selling coffee in red and green paper cups (gulp), I’ll take the liberty of penning a 2011 prediction that I’ve already stated to many industry insiders:

Expect Intuit/its’ competitors to make a SaaS-based social software acquisition (such as Yammer, Basecamp or Socialcast) or enter the business organically. Intuit’s core competency in my view is less about its’ ability to sell hosted business process services but it’s close relationship with a gynormous SMB base, thanks in part to its amazing community building efforts. They’re way ahead of the curve that I laid out here over the summer. And tacking on collaboration for an additional $1-$3 a month looks like a slam dunk way to own employee engagement  – a capability that’s an extremely fragmented or even down right neglected system-of-record in the SMB software stack.

Based on what were seeing in the market in our work with large-co buyers that are looking to execute social software enabled business programs, I see a few more industry shifts coming to market that buyers and sellers need to get ready for. But this was worth an open discussion right about now.

Enterprise social software is in for a wild ride in 2011 as large companies enter the market and smaller ones alter their focus to solving known business and process inefficiencies. As a result of this, expect the sell-side to get very very noisy with their marketing.

As someone who cut his teeth in the traditional strategy consulting business, SWAGs (‘strategic wild ass guess’) were common back then. Thankfully (hopefully?) we all get better with age by adding experience and logic to what we expect to see coming down the pike : – )

For research on market moves as you make/validate critical business directional decisions and technology choices, get in touch.

From the ReadWriteWeb article by Sarah Perez:

“Kevin Thau, Twitter’s VP for business and corporate development, announced during a presentation at Nokia World 2010 today that everyone’s favorite micro-blogging network is not actually a social network.

It’s not, you say? No, says Thau: Twitter is for news. Twitter is for content. Twitter is for information.“

Say what? 

Here’s my take on why:

• Twitter is having issues growing as a mainstream social network compared to other platforms such as Facebook. Significant changes to its basic interface can fix this but that would mean it looses its stronghold on remaining the globes premier digital water cooler.
• Lets face it, 99% of Twitter is already broadcast content and if its a business tweeting, its mostly one way Marketing. I guess Twitter believes that as well.
• It limits its exposure to a potentially dwindling market valuation as it stays associated for too long with general purpose networks. The track record for those in second place (Bebo, MySpace etc) is pretty shabby. And most of us are happy doing general purpose networking inside Facebook, Location based networking on Foursquare etc, Food based networking on Chowhound and my new favorite app, Foodspotting (HT, Dion Hinchcliffe). And on and on. There may just not be room for two general purpose social networks but certainly for a real time news pipeline.
• Monetizing cryptic, abbreviated, 140 characters via ads is hard and may have limited potential. Straight line syndication, promoted tweets, and large b2b biz dev deals (such as the one with Nokia and with Google) bring wholesale, but forecast-able sources of revenue. Thereby establishing a baseline market value to build a multiple off of. Facebook is on a tear from a revenue standpoint and either you have to show you are catching up or, re-frame the markets perception of the category in which you play.
• Publishing (the industry), has been ripe for disruption for a long time and is looking for scalable ways to distribute content. RSS had potential for distribution but sucked for high end monetization in addition to being gobbledygook for most mainstream users. Twitter on the other hand keeps you coming back to high end website impressions. And so the broadcast model via twitter is a lucrative and cost effective ‘paper boy’ model for the digital era.
• I know from personal experience that many people sign up but don’t really do much or even return for fear of not having friends or having something to say. As stated in the article, this brand shift removes the perception that you HAVE to sign up and use twitter. Rather, come to the site and just read. In short, more eyeballs without a registration barrier. Biz Dev just got a lot more interesting.

I’m as interested in the message this sends about its future plans and roadmap to developers as well as to those of us that have spent time using it as a social network.

That’s all the time I have. Any other ideas on why they would publicly put a stake in the ground about this?