Pretzel Logic – Social and Collaborative Business

Here’s a screen shot of a Twitter search result for a blog post labeled “Four Reasons Why Enterprise 2.0 Communities Fail”

Over 60 Re-Tweets on Twitter as of April 19th resulting in god knows how many tens of thousands of impressions on Twitter. Yay for social media syndication.

There’s only one problem. That link hasn’t worked for three days.

So, basically, this link was never even clicked on before being re-tweeted.

Now these good intentioned folks may have well wanted to read the link later and I’m no one to judge how each of us as participants choose to use the medium. But if Re-Tweets are being considered an acknowledgment of quality content and subsequently relied upon as a metric by marketers, a Re-Tweet itself can clearly be a terrible measure.

I’m a huge advocate for social media engagement as an important component of marketing. It’s got mucho potential. That said, we complain about inaccurate open or click through rates with respect to email marketing but measuring the effectiveness and true reach of social media has a long long way to go as well.

So if a link drops on Twitter but there was nothing there to read, will it make a sound? You betcha. A really really loud, albeit hollow sound.

Hoping practical topics such as this come up at the 140 conference today.

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I was very disturbed to learn about the passing of Professor C.K Prahalad this morning (hat tip to Shiv Singh).

There were a few books in the 90’s that had significant influence on shaping my personal thinking about how to accelerate performance in business. Three notable ones were The Ultimate Resource (Version One made the case for how entrepreneurship was the ultimate resource but that’s out of print now), Execution and Competing for the Future, by CK Pralahad and Gary Hamel.

About the professor, from Wikipedia:

Prahalad has been among top ten management thinkers in every major survey for over ten years. Business Week said of him: "a brilliant teacher at the University of Michigan, he may well be the most influential thinker on business strategy today." He was a member of the Blue Ribbon Commission of the United Nations on Private Sector and Development. He was the first recipient of the Lal Bahadur Shastri Award for contributions to Management and Public Administration presented by the President of India in 2000.

In this latest book, “The New Age of Innovation:

Professor Prahalad and M.S. Krishnan suggest an internal capacity to reconfigure resources in real time by focusing on clearly documented, transparent, and resilient business processes (the link between strategy, business models and operations) has become a strong differentiator.

As many of you know, I focus militantly on how the internal design of the enterprise need to be re-casted to meet the social customer’s demands and how to compete effectively. Technology differentiation as a competitive weapon played a central role in the last round of management thinking and strategy. Going forward its going to be about how effectively you can create and leverage people networks to solve business problems and get ahead by complimenting those discrete processes that have been unnecessarily fenced in by those very structured systems. Technology obviously has a critical role to play. But its a lot more than that.

Professor C.K. Prahalad was one of the few that not only pushed the boundaries on where organizations need to be interms of their thinking and wiring but he was one of the few that brought practical solutions that were cognizant of realities on the ground. More important he never lost sight of the “how” as he presented new thinking around the “what” and the “why”.

Here’s the professor on Innovation:

The Hindustan Times and Business.in have more details.

My deepest condolences to the Prahalad family and his loved ones during this difficult time. May he rest in peace.

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If you’ve read this blog before, you know that the central theme here as well as in my work is centered around performance acceleration and so I love seeing quality stuff on this topic. Dion Hinchcliffe has a super post up on ZDNet addressing the topic of performance in the context of Enterprise 2.0.

Dion provides a very balanced score card on the results to date as far as Enterprise 2.0 is concerned:

In fact, I would propose that most of the theoretical discussion around the benefits and returns of enterprise social software is largely out of context. We still focus too much on the tools themselves (which are exciting), the potential for radical organizational change and/or transformation of traditional hierarchies (also very interesting, yet it unnerves those trying to run a business even though such transformation takes a time), and a focus on new collaborative approaches instead of looking for the best way to solve business problems. What is often lost when the primary focus is on Enterprise 2.0 — defined here as freeform social tools in the workplace, or the “Facebook imperative” — is a concentration on developing solutions to achieve specific business objectives. When you have tool myopia, it sometimes seems like every business problem looks like a nail for your particular software hammer.

Amen.

The topic of performance and alignment around business objectives has been covered by a number of thinkers and doers in the space, including Hutch Carpenter, Bertrand Duperrin and Oscar Berg. Over a year ago, I proposed a simple illustration for practitioners to consider, that differentiates between the notion of social computing (concepts and tools) and Enterprise 2.0 (a state the enterprise achieves), depicted by this diagram from a much older post:

Similar messages have come from a number of folks, calling feverishly for business justification and performance alignment. Some great examples from Bertrand, Oscar and Hutch here. That’s a sampler but these and other thinkers have contributed excellent thought leadership and grounded ideas on this topic.

Dion brings up a good point that there’s too much focus on tools. No question about that. But his second point about radical transformation is far more important:

There’s still plenty of theorizing and even calcified views around the promise of social for social’s sake where making the business social from the core out is just the right thing to do. I’ve firmly believed and consequently advised clients to look at it differently. At a time when organizations are looking to pull themselves up from a near death spiral by surgically focusing on set of needed business fixes, instead of providing the necessary depth to articulate what’s structurally wrong with a given mode of conducting a business activity and how enterprise 2.0 could be a possible performance enabler, the focus often is on the benefits of social towards more nebulous outcomes such as openness, information and email overload, sharing, and productivity. All of these are important but addressing these benefits need to be a means to some measurable business end.

Where it can get even more dangerous is proposing decentralized DNA changing models to move to social from structured and process, again with an under appreciation for business context, decision facilitation structures and other political and incumbent design realities on the ground. Not to mention, proposed decentralized governance models as amuse-bouche. To be clear, I’m not against proposing DNA changing business designs in principle, but boy you better be able to back up the justification behind that 24 month turnaround plan your suggesting that’s more substantive than the revolution that is socialized work without a cause. Right about that time, the CIO sitting in the room is quietly thinking, “I have a worldwide SAP upgrade to worry about, thank you”.

The notion of emergence where adoption of these E2.0 concepts and tools comes from the bottom up just never sat well with me. But, ironically, if there’s one place where I consider emergence to be totally applicable is in fact the DNA change process, built off of the success of discrete business outcomes and subsequently federated across the enterprise. That’s a topic that I deal with all the time, but I won’t get into it here.

And culture, whilst certainly a common adoption barrier, is often cited as a huge deterrent to adoption, when in actuality, the required business alignment was missing in the early stages resulting in fuzzy understanding around participation incentives by end users to give enterprise 2.0 a real chance of success to begin with. Practitioners are beginning to see that culture and behavior can actually be harnessed to drive adoption and ultimately performance. Change is scarce currency in any enterprise context.

Not that it matters too much, but the process pundits will continue to barf on social as long as these altruistic benefits of the enterprise social web command the airwaves. To their credit they have a point in that its going to take a lot more to unlock those business initiatives (and budgets) that are enabled by structured ERP systems or Microsoft SharePoint that conveniently shows up with Windows Server on every Sys. Admins desk.

Ultimately, a central problem lies is measuring or estimating performance for Enterprise 2.0. As Dion says it is in fact notoriously difficult.  But it shouldn’t be done in the first place. Performance or return needs to be calculated and measured at the programmatic level around business solutions your trying to affect. Enterprise 2.0 approaches and technology are but one part of the overall strategy, investment, return and risk model.

Social because its better than anti social is hard to argue with, but it just won’t cut the mustard in the long run, especially on Mahogany Row. Focusing on business performance, and a credible, honest assessment of where social and collaborative concepts actually can in fact move the needle, will.

Talking about honest assessments, here’s a quote from Chris Yeh, a vendor and investor in Enterprise 2.0 software that speaks volumes:

Customers who buy PBworks as an experiment in “social software” tend to see an initial spike in activity, but disengage over time.

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On the heels of SalesForce.com’s announcement of ChatterExchange this morning, FinancialForce releases Chatterbox – a rules based overlay on Chatter that allows businesses to associate the use of collaborative constructs with discrete business activity. For those of you not familiar with Salesforce.com’s Chatter, I covered the initial release, here.

For all the benefits of Enterprise 2.0 software, the biggest stumbling block has been this lingering feeling that its a solution looking for a problem to solve. And so even if you got past the skeptic managers and secured the green light to give it a shot, come adoption time, the use case for collaborating and socializing business conversations in the open via a microblogging application in favor of email just never came naturally. And at that point starts the real scramble: backfill use cases that might appeal to certain users, conduct training programs, institute herculean behavioral change management processes and devise incentive plans to get active usage up to a respectable level.

Welcome to the Enterprise Context Web.

FinancialForce, traditionally in the business of bringing Finance and Sales together on the force.com platform has built a rules and workflow facility to incorporate those very important social and collaborative elements and data triggers that make a given business activity whole. All on top of Chatter. Here’s how the finance and accounting community can collaborate over bean counting topics, using micriblogging constructs:

• When an outstanding credit on a customer account goes over 90 days – finance and sales professionals linked to that account can be immediately alerted, then they can quickly identify the reasons for non-payment and act to try and solve the problem to help cash flow and prevent further sales to that client being held up.
• When a specific supplier has been paid or a new supplier engaged – to help procurement and marketing departments better manage their suppliers and improve relationships.
• Customer accounts that show no activity for a specified length of time – may indicate service deficiencies and help ensure customers are contacted regularly.
• New sales over a specific size or won against a key competitor – to keep management and marketing abreast of sales trends.

Where unstructured and, really, knowledge access and sharing was conducted directly in email, via Chatterbox,  now accountants and finance professionals can now tap into the larger community for expertise and critical customer knowledge to understand exceptions in a process (say, an overdue invoice from an otherwise timely customer). If Chatter is adopted as the central collaborative backbone at the organization, it can now becomes the common watercooler to show up at with specific business data and context and where collaboration happens. Far beyond the out of the box process integration with Salesforces’ CRM application.

I still don’t believe that this eradicates adoption planning and more importantly incentive structures that encourage wide scale usage, out of the box. As I discussed with the FinancialForce folks, with respect to finance and accounting professionals, making it second nature to use a microblogging format to notify people over email needs to be preceded by showing the value of ambient outcomes. Accountants by the nature of their job do in fact need to conduct a lot of business in private and so subconsciously knowing when to going private vs. open might be a bit of a struggle. Add to that, most finance and accounting folks especially at smaller companies already know the 5 people at the company that might have the best answer for what generally are very specific questions. And on the topic of receiving data alerts in the microblogging stream, well, native enterprise apps have had email alerts per se for decades. Where process knowhow and training comes is to show communities wrap around critical alerts to respond to an event, thereby enrichening the outcome. Data events bring context out of the gate and that makes adoption and showing business benefit far more straight forward.

One smart thing that FinancialForce has done is to not limit the use of Chatterbox to its core financial product. By offering Chatterbox as the rules engine for any application on the Force.com platform, it limits its reliance on the financial and accounting user and that’s a really smart move.

Microblogging and data access is not new to the Enterprise Social Web. Pure play Enterprise 2.0 providers such as Socialcast and Socialtext both offer similar features and the upcoming release of Tibbr from TIBCO boasts this as a central theme to its own microblogging offering. But it’s all about distribution. And force.com brings awareness and distribution. And the rules engine offered by Chatterbox brings needed context to enterprise 2.0 constructs that’s been missing for far too long. As my friend Megan Murray commented to me, that’s Peanut Butter and Jelly or Carrots and Peas. Finally.

Dennis Howlett, an accountant by trade originally is optimistic, saying:

One off surgical help is useful, but the larger opportunity comes in activity pattern discovery where what� Sigurd Rinde might call Barely Repeatable Processes are captured and become actionable in the context of business processes that matter. Does this excite you or is it a huge yawn? I know where I am placing my bets

Some links on Chatter Exchange here as well and Paul Greenberg puts it all in context on his Social CRM ZDNet blog

Will it make it? I think so. Is there still a need for proper strategic planning and follow through for large scale uptake? No question about it. But that’s no different from any other enterprise software category. One things for sure – having the software make it simpler to illustrate business cases out of the box makes it a hell of a lot easier to pass the initial litmus test.

Finally, social starts to embrace process.

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Lots of strong reaction to Union Square Venture Partner Fred Wilsons comments about Twitter (his portfolio company) today.

On the issue of third party applications that leverage Twitters API, Fred commented that a lot of the apps today are filling holes in twitter instead of building substantive businesses.

Much of the early work on the Twitter Platform has been filling holes in the Twitter product. It is the kind of work General Computer was doing in Cambridge in the early 80s. Some of the most popular third party services on Twitter are like that. Mobile clients come to mind. Photo sharing services come to mind. URL shorteners come to mind. Search comes to mind. Twitter really should have had all of that when it launched or it should have built those services right into the Twitter experience.

The media jumped on it. In a post titled “Holy Cow Did Twitter’s Top Investor Drop A Bombshell On Twitter App-Makers Today”, Nicholas Carlson lays out some strong reaction from the Twitter App community.

But we talked to sources at a few Twitter apps, and one of them told us Fred’s message is loud and clear. This source heard, "[Twitter is] going to do mobile apps and URLs. [Twitter is] way playing down the role of other apps. [Twitter] desperately need somebody to do vertical/gaming stuff, since that’s what we aren’t going to do ourselves. Bit.ly (as a URL shortener), TwitPic (as a photo uploader) and Tweetie (as an iPhone app) are now considered ‘core’ to the platform. They will either be bought or competed with."

First, Twitter is infrastructure. And true to that mission, it supports the building of applications and services that sit above it. Over time, applications and services start to get commoditized and adopted widely across the ecosystem. At that point, features offered by these apps are considered infrastructure and as history has proven, get pulled into the core of the application. Phone companies provided phone lines and tele marketing businesses built a value add service on top of that. Similarly, utility companies provided juice that allowed us to go from analog to digital with many of our appliances. If you agree that Twitter is infrastructure, the same thing is happening here. Over time the economics change. AT&T now offers business services that sit on top of its phone lines. That’s natural evolution as the service gets commoditized and there’s wide appeal. The market expects it to come as part of the base package and the stability and assurances that come with such a move. And the same thing is happening here.

Second (and this did not come up in Fred’s comments), Twitters success to-date largely mirrors traditional media – its broadcast for a majority of the users. Not conversations or other kinds of synchronous activity that those of us in the early adopter community have embraced. Don’t know about you but I’ve lost count of the number of mainstream users that fully realize the value and promise of Twitter only after they use a third party client such as HootSuite or Tweetdeck. So unless your only interested in following celebrity tweets, engaging with users or discovering new users via Twitters native interface is nothing short of awful.

Twitter needs to fix that as its price of entry stuff. And so coming out with its own spiffy client is imperative. And there’s similar arguments to be made for URL shortners and mobile clients – both critical to engage in a 140 character constrained world. And critical to Twitter if its to be able to successfully haul the water in the long run.

So it may come of as a harsh warning, but it’s natural evolution.

UPDATE: And just two days after posting this, Twitter announces the purchase of Tweetie, a Twitter client built for the iPhone and the Mac. Marshall Kirkpatrick at ReadWriteWeb has some good analysis on this breaking story.

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I don’t focus on product launches or ‘breaking news’ here on Pretzel Logic. I have a full plate on the work front.

The two exceptions when I not only cover but downright celebrate product innovation are:

• If I see traditional application or enterprise 2.0/social software vendors having the chutzpah to even attempt performance acceleration via the combination of process + social. You still need a strategy and plan but it makes execution a hell of a lot easier if the software is designed to account for context. See this on Chatter, for size.
• When enterprise 2.0 products take existing business functions in the enterprise and improve insight and diagnostics for managers to improve decision making and reduce business risk. See this on new opportunities that social software bring to improve Employee Performance Management.

That said, I’m fortunate to see plenty of demos and hear how the product does in fact accelerate organizational performance and why my readers or clients should care.

I’ve only recently taken to getting briefed by vendors but I spent many years in technology sourcing starting with my days as the practice lead of west coast tech strategy consulting group at marchFIRST (USWeb/CKS) and that continues until today. And our firm(s) remained retained through system deployment so we couldn’t skip town after presenting a vendor recommendation in a pretty PowerPoint to the customer. As a result, separating wheat from chaff when a vendor is presenting is second nature to me.

After sitting through presentations and demo after demo here’s one situation that I see over and over again. To the degree that you are doing this, I hope you consider this as constructive feedback. Here goes…

Stop raving about your product in the context of it’s last incarnation.

Over exuberant product managers, often weighed down by the baggage of the last version get very excited about why this version is better. And how it does so much that the previous version did not do. And quickly proceed to declare it as ‘game changing’.

If it’s game changing, it better be game changing in the context of:

• first, performance objectives that are keeping customers in your target market up at night
• second, the competitive landscape and installed base at the customer and in that context, how compelling your offering is to successfully overcome the switching cost of moving to your application. Hard cost as well as soft costs (culture & change management)

Your last release or update is already obsolete in technology years and for the most part, its a pretty weak baseline to benchmark against. Whilst its tempting and human nature to realize “how far you’ve come”, customers don’t buy based on that. They might appreciate the progress. But its not enough to cut the check. Same goes for influencers and analysts that can spread the word for you.

What’s ironic is that good product managers in fact start with market and competitive research to build a business case. Then move on to understanding how new features and capabilities change the existing release. But when they present and showcase, they forget all that hard work done to assess the opportunity and gaps in the market. And proceed to do a feature shoot out with their previous version.

After a decade of buying big ticket software and not necessarily seeing the ROI, buyers are more sensitive to ensuring stringent vendor evaluations than ever. This is one simple but very rectifiable measure. 

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My good friend (and fellow competitive swimmer, back in the day), Dina Mehta, wrote an insightful post based on her research work around the topic of product durability. Though she refers to her findings based on the Indian market and the changing nature of durability, locally, there’s no question that this is a global phenomena.

The central theme of the research is that consumers value product durability less and less as time goes on. It used to be that when we bought products and services, life of the product was an important consideration and products were advertised as such. In Dina’s post, Stuart Henshall provides the most well known example:

When I think durability I think of Maytag – the washing machines that go forever here. Yet today that “durable” isn’t expected to last 20 years and new features, energy efficiency etc are changing the definition

Dina provides some great local examples of how consumers look at durability today. Based on her research, she concludes:

Thinking thru current Ads on tv – only the infrastructure and paints guys seem to talk about Durability in their communication today.

As Dina points out, its obviously not the case that customers don’t want products that last; it’s just that the markets in India finally afford choice. When I grew up there, you could only by one of 2 types of cars, a handful of electronic or appliance brands or for that matter, chocolate (yes, a travesty). All that’s changed now. And with choice comes the desire and willingness to swap for newer, shiny models at a more frequent pace.

There’s plenty of parallels to be drawn in the rest of the world where choice has been standard for decades. However, the marketing approach to this was to turn up the volume when it comes to badgering the customer with more marketing emails. Or to throw in the towel and compete on price with promotions that were often loss leaders or just a way to empty out the warehouse.

Durable Relationships

The truth is that in this age of transparent and open marketing which is moving to influencer and peer to peer modes, one sustainable approach to respond to this consumer trend is to focus on building durable relationships with customers. Existing customer relationship programs and enabling technologies (CRM) often enforce a fenced-in transactive model where its about that individual sale. That needs to move to a relationship model that can outlast that single transaction. And with the proper strategic planning, create an interaction environment that results in durability. Choice is here to stay. All you can do it make the customer comfortable with the notion that your first in line when they are looking to exercise choice. And one way to do that is to preemptively help them understand exactly why and when you should be in consideration. Thats done through effective customer Networks.

From a programmatic stand point, the answer is not jut Social Media or some other over intellectual way of looking at public or consumer relationships. Social Media is part of the larger tapestry. The answer lies in reworking the process of building and sustaining relationships with customers via social and collaborative forms of engagement. That comes from revisiting the mode of engagement that extends far beyond the nominated “social media leads” but permeates the walls that today, omit interaction with traditional sales, marketing, internal and partner experts who truly have the most substantive knowledge. Anything less will come of as plastic.

In turn, from an enabling technology standpoint, that means rethinking how your Social Media, CRM and so called ‘SocialCRM" and ‘Enterprise 2.0‘ efforts come together to build and foster genuine, durable relationships.

I highly recommend you read Dina’s original and follow up post on the implications of durability taking a back seat in the context of purchasing behavior. She’s got a very passionate community of intelligent folks that have provided comment.

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