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.

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.

I’ve always been a bit of a closet branding nut with specific interest in tag lines. Something about meaningful one-liners that express the essence of an institution. How well they live up to it is another matter but there’s something about winnowing it all down to a single sentence that expresses your raison d’être.

“Live Richly”, the tag line adopted by Citi years ago was always one my favorites. More so than even Apple’s “Think Different”. Within seconds, Live Richly made you re-think personal money management from one of a die-rich strategy to one that suggested an enjoyable journey might be entirely possible.

Live Richly also led me to think about how employees would like to spend their 9-5 workday. Dying richly equates to just the paycheck that comes at the end, which of course is important. But living richly comes from richness in terms of peer, partner and customer interactions, in terms of richer quality of insight, richer intellectual stimulation, richer idea creation and ultimately, richer output with respect to the stated business goal.

Traditional structured enterprise software that binds participants to a forced sequence of steps is far more restraining and claustrophobic than the highest walls of any office cubicle. It insists that work gets done from start to finish in a certain way, limited to only what you think/guess to be the best answer, and with little maneuverability until well after the outcome and when its often too late to course correct. In and of itself, there’s no richness of anything in that. We might as well sit robots down at the keyboard, like we do on the factory floor.

Structured process software such as ERP, CRM, ECM, SCM and the like, you absolutely need. It closes the books, keeps the various authorities happy and offers an audit trail.  And some jobs are in fact robotic in nature. But for the rest, well designed collaborative approaches to work and effective use of social software reduces risk and improves output by enabling you to bring your rich network along with you to every blind corner, to every fork in the road and to every dart game presented by structured process. That’s improved outcomes for the business. And for employees, Working Richly day in and day out.

Gartner Research says a total of $3.8 Trillion will be spent on IT in 2012 by you and your peers. As buyers, before you start to spend your 2012 budgets on more of the same old, same old, take a deep breadth and envision how rich your working environment will be when its all said and done.

That’s all I’m saying.

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.

Lets cut to the chase: The business intelligence we rely on as enterprises to perform better can suck at times. I remember a famous dot com era business systems accomplishment that was touted up and down silicon valley. I paraphrase but it went something like this: “Cisco has the ability to do a virtual close on its books every night. That’s real time IT enabled management”. Well, fat lot of good that did with respect to anticipating the coming economic nosedive and preparing accordingly. Just like everyone else, Cisco stock fell from a high of about $80/share to under 20 bucks. This isn’t a ding against Cisco. Many organizations did the best they could to be operationally efficient with the tools and process thinking available at the time.

Our ability to track, forecast, measure, analyze and then tune or change course has been a wild west effort for a long time. For a number of primary reasons:

1. The intelligence we need is often in the wrong hands. By being top loaded primarily for the management ranks, we still faced the same down stream do-something-about-it execution risk.

2. Rolex watch style exclusivity for the chosen few that monitor as opposed to those that have the skill and responsibility to act and course-correct.

3. Almost zero ability to federate tough problems and let the best minds even get wind of the problem, let alone contribute to solving it.

4. And finally, business at the speed of PC access that just doesn’t cut it, especially today.

It’s as much a people and a design problem as it is a technology feat. But as I’ve said numerous times, it’s a hellava lot easier when the technology plays nice. Last week I had the opportunity to see some new enterprise performance management technology from TideMark that brings a fresh approach to an age old business problem: Really complex and expensive technology that produces reports and charts that few and sometimes the wrong people inside organizations read and react to.

Ben Horowitz of Andreessen Horowitz (investors in TideMark) characterizes the problem in a different way but it captures the essence of the fundamental change in how we need to look at the health of our businesses:

“Beyond these platform advantages, Tidemark changes the nature of data analytics by ditching the two fundamental and problematic questions on which the existing industry is based:

• What data do I have?
• What reports do I want?

The trouble with these questions is that a) it is highly unlikely that you’ve gathered all of the relevant data in the right schema and format prior to needing it, b) businesses are not best represented in reports and c) the reports generally say very little that’s interesting about the future. “

I dont cover software releases often here but this one is different. Why? Because it speaks to what you’ve read here since 2009: How performance acceleration comes from leveraging the best of structured data and insight on one had, and manipulation smarts of our employees, our customers and our partners. All in the context of a business problem or an opportunity.  TideMark strives to do just this. By leveraging the efficiency and agility of the cloud and contextual collaboration, and in harmony with more current data sets that include not just critical internal data in your business systems but also pubic and public social data, they want to give you a more holistic answer to critical business questions. Not after the fact but when there is time to course correct.

TideMark seems to come at the problem with very promising elements. See what Dennis Howlett has to say about the state of financial insight, and Larry Dignan‘s take on the intricacies of Enterprise Performance Management. I distill down the value that TideMark brings, to three big elements:

1. Analytics in the hands of those that can DO something about the insight.

TideMark is designed as much for mahogany row as it is for those on the line managing critical execution and decision-making tasks. A huge distinction as compared to traditional reporting and metrics data which is limited to more senior people. Ultimately, its the store manager at Starbucks, the Factory Planner in the warehouse, and the UPS driver that can tell you how likely you are to meeting business objectives. And more important, fix the problems that can derail a business plan.

2. Collaboration at the point of context.

It fascinates me how we’ve lived such unnecessarily risky lives as business managers by limiting entire processes to a few chosen few that we think are the best people for the job, from concept to finish. The marketing expert can’t easily reach out to a product manager, the sales rep doesn’t even know who designed the products they sell. By enabling collaboration between anointed experts and the rest of the organization, we can plan and predict far more effectively. To do that we need to enable collaboration at the right points in our data consoles and our workflows. Its early days and TideMark has ways to go to enable silo-free collaboration but what is important is that they recognize the pivotal role of collaboration, enough to include it in version one. This how enterprise systems need to be built in my opinion and they have so, from the get go.

3. Designing for today’s dataset.

The public web gives you more unfiltered data on what your customers really think than we’ve ever had in the history of marketing. But to date, our collection and understanding of this data has been through brokers and manipulators of this information, and at latency levels that would just never work today (e.g. 4 months for a competitive assessment from your favorite management consultancy). Any business intelligence and performance management tool today needs to be able to take in first hand data and create insight that sits alongside what our ERP applications can tell us. That’s a true amalgamation of not just what we think about our businesses but what our customers and partners objectively think as well. Tidemark proposes to account for this holistic view.

Beyond this, they have the other elements of what makes a 21st century business application relevant, let alone useful.  Device-first design to get you analytics and performance data that cannot wait till you get back to your desktop. And native integration into existing systems such as SAP and Oracle that house underlying data.

The devil is in the details but this is clear: This fight is going to be one that’s fought with knuckle-dusters. Incumbent providers such as SAP, Oracle and others have cloud based BI and EPM solutions, complete with tablet consumption abilities and an established distribution channel to boot. And we’ve already seen cloud based BI such as Lucid Era fail to get off the ground indicating that this isn’t simple. But TideMark seems to have thought through the simple elements of what makes performance management well…perform: be available where decisions need to be optimized and committed, understand the needs of public and private raw intelligence, and finally – democratize collaborative decision facilitation to get the best possible insight.

Dennis has this right. It’s early days but TideMark has the opportunity to fill the glaring void in the emerging ‘Cloud Cabal’. Salesforce.com offers CRM, the underlying force.com platform and the social layer in Chatter; Workday currently offers HCM and Financials and pipes data into and out of Chatter; Kenandy brings Supply Chain/MRP to Force.com subscribers. And now TideMark offers EPM with ready hooks into Workday.

This is one to watch.

As a follow up to this post commenting on PriceWaterHouse Coopers (PwC) extensive report on Social and Collaborative Business, PwC just published the conversation we had a few months ago. We talked about the following:

• Recent challenges companies have been facing on the collaboration front
• The current generation of tools and how they’re moving toward that goal and advantages/ disadvantages / inhibitors of different approaches
• Systemic inefficiencies
• And in the midst of all of this, the changing role of Identity (more on this subject, here)

You can find the whole interview on PwC.com, here.

I spent fifteen minutes with Oracle’s President, Mark Hurd, along with Sudhir Chowdhary from the Financial Express yesterday at Oracle OpenWorld 2011.  These were the big take aways from our conversation:

1. Collaboration Moving Front and Center

Oracle seems to have rationalized its’ investments in the areas of content and collaboration technology and has come to terms with the idea that collaboration needs to be front and center in its’ portfolio offering. I asked Mark how he rationalized not catering to the other 80 odd percent of the average employees’ daily time that isn’t spent in one of Oracles’ ERP/CRM and other process apps in any integrated way. At a previous meeting with Oracle’s executive team earlier this year, it was clear that customers do have collaboration on their minds. And earlier yesterday, Anthony Lye, SVP, CRM, also confirmed that the subject of activity streams will be broached during the CRM keynotes. Mark responded with “I absolutely agree and stay tuned – there’s an announcement coming over the next 48 hours on collaboration”. Across these conversations what’s clear to me is this: Oracle will be declaring its intentions in both traditional collaboration and also some of the newer flavors characterized by enterprise social networking and activity streams.

We’r seeing a growing need for this in the market as collaboration needs mature and become more sophisticated beyond general purpose sharing. And so I have high hopes for a fitting response to collaboration that’s cognizant of process. Oracle is also one of the few companies that can, in principle, get this right. Given what I saw of Fusion’s Rich Identity features last year, it doesn’t seem like a stretch to expect that Oracle will infuse findability and collaboration into its overall business systems offering. So consider this a heads up for you fellow Enterprise 2.0 and Social Business gear heads out there. Fingers crossed that it isn’t just silo’d collaboration that ignores the needed context hidden inside the various business systems it offers.

2. Catering to the Exa-customer’s Cloud vs On-premise Needs.

Exalogic, Exadata, Exalytics. It’s all about the mammoth and gynormous here. Mark’s assessment is that Oracles’ primary customer base will look for a staged move to the cloud, if at all. In the way that it was described by Mark, the logic was this: large companies expanding to new regional markets may choose to go cloud and leave the mother ship on-premise. They may change that configuration at a later time and go all cloud, or extend cloud solutions to front end back end installations.   Oracle proposes to offer the needed flexibility using one code base as customers move to all cloud or partial cloud…or never cloud.

The message was that from a customer stand point, Oracle is ready if and when the customer is. An alternate interpretation of this would be the following: stretch out the license and maintenance revenue model of on-premise software for as long as the customer is willing / needs to keep an on premise foot print. Be ready with a plan B if the customer decides to shop its technology needs and considers cloud based systems a viable option.

3. On the new crop of Competition:

It seems as if Oracle finally has a game plan to play both offense and defense with cloud based providers. To be clear, no names were named but its easy to connect the dots and see that companies such as Workday and Salesforce.com were reference points. The market view presented by Mark was this:

• Newer cloud based offerings already have an older code base compared to Oracles’ OnDemand line.
• They don’t currently have the vertical specialty that Oracle’s customers look for.
• They don’t have the safe pair of hands /maturity of Oracle.
• They don’t have the integrated suite of all ERP applications.
• And finally, Oracle has the kind of scale of operations that’s needed to carpet bomb the large company buyer landscape with an OnDemand value proposition.

Looked at in totality, this a very different message from the previous points of view that went from the cloud isn’t new to the cloud exists but it’s best in a box. Clearly there was a recognition that Oracle’s market is in fact considering alternate solutions that don’t only come from the likes of SAP. And so it’s game on, from Oracle’s stand-point.

So there you go. I’m looking forward to seeing how this all comes to fruition over the next couple of days….

Comments rolling in on Google Plus, here.

Image Credit: Mike Maloney