Walter Adamson

Are Cloud Computing AND Social Enterprise both at Tipping Points?

A tipping point is when a small input related to a change pattern suddenly creates great change - perhaps takes off to critical mass. I wonder if Marc Benioff of Salesforce has done that within the last couple of weeks in relation to both cloud and social enterprise? My bones are stirring!

Security and privacy no longer a barrier

"... people erect these barriers around security and privacy, which in some ways are very unfounded. And the reason I think they’re unfounded and ridiculous ..."

Who said that - someone from Amazon, or Microsoft, or Salesforce?

No, it was said at a Dreamforce 2011 panel by the former US federal government chief information officer, Vivek Kundra.

He added:

... is because the United States government already has outsourced over 4700 systems. These systems are already in the hands of Lockheed, Raytheon, Boeing, Northrup-Grumman — you name it. Yet when it comes to Cloud, for some reason, these fears are raised.

To me that's huge. That's game over for governments everywhere.

Of course the US Government, and its cloud suppliers, can afford to have US-based storage and clear legal jurisdiction. Which means THAT issue is the fundamental issue for other governments to resolve and then they can plan their move to cloud.

Same story for business. But actually much less of a story since 99% of businesses aren't bound by the same restrictions and vanity requirements of governments.

The 10 years which Benoiff has been pushing cloud, and it's been a hard sell, may be about to pay off in a big way. And his efforts will take the whole industry forward with him across the whole spectrum of "cloud" services.

Social enterprise is suddenly everywhere, thanks to Dreamforce

Much more recently Benioff has become a leading advocate of social business and the social enterprise. The change just now is that at the 2001 Dreamworld social enterprise was everywhere! This spurned a huge lift in reporting e.g. Salesforce.com Steers Social Enterprise Movement Amid Cloudy Outlook. And see what Liza Sperling from Seesmic said:

Dreamforce 2011 is over, and many attendees are likely still reeling from the energy, enthusiasm and explosion of information about the social enterprise.

Most surprisingly to me was that the way it was reported was almost like fait accompli. Remarkable!

I completed my certification in Social Media Strategy back in 2009, from the Palo Alto-based Social Media Academy founded by Axel Schultze. Professionally I've benefited enormously from that superb business-based training program and the methodologies. But it's still been something which has to be pushed.

Much of my consulting is centered at the intersection of cloud computing, mobile, social business, and collaborative commerce, and what businesses need to do to prepare for and survive the impact of the coming shifts. And that's also been somewhat evangelical - I only see the innovative, forward-thinking types.

But I am getting a feeling that this is all heading mainstream right now, at least the cloud and the social enterprise parts of the equation. Mobile has a bit to go. It is being catalysed by the consumerization of IT, and Apple, but not yet at the tipping point. And collaborative commerce is still only early thinkers and adopters (as far as how all these impact "traditional" business models, I mean).

Social enterprise front, left and center

But in social business, social enteprise we hear this:

During the week-long Dreamforce, the common catch-all phrase from Salesforce.com executives was that Social Enterprise has become the rocket ship "that will propel the business of anyone associated with the vendor’s platform and applications strategies to stratospheric levels".

But we don't just hear and read it once, and just from Salesforce. We are starting to hear it everywhere and all sorts of business people are picking up the message - see here and see what you find on Google News.

Something is happening, and I think the next 12 months might be a lot less evangelical and a lot more practical, thanks to the education effort of players like Salesforce and Marc Benoiff.

What kind of sense do you feel about cloud, and social enterprise, as business trends?

Do you think we're near a tipping point for either and why?

See my question on Quora.

Please comment below.

Walter @adamson
http://xeeme.com/walter

PS Some readers may think that Salesforce is just another quite shallow vendor hyping its latest Chatter enhancements with a show about social enterprise. In that case you should read some of the thoughts underlying it, in particular those of JP Rangaswami.

Image from www.enterpriseirregulars.com

Klout Perks launches in Australia - I got Perked!

I was going to write a more meaty post today but checking my email this morning I found one from Klout offering me a SIM card from Red Bull Mobile Australia as a Klout Perk. I was intrigued, and seems it is new in Australia.

Red Bull MOBILE is giving key Australian influencers a Ticket to the World of Red Bull.

You are receiving the perk because you are influential and have authority on topics related to the perk. You are welcome to tell the world you love the perk, you dislike the perk or say nothing at all.

So I'm surprised to find I am an influencer. Klout looks for "influencers" on topics related to the offer. I'm not sure what my relevant topic is as I only come up under "social media", "business", "consulting", and "cloud computing". Or maybe there were so few members in Australia they just sent to everyone above a certain level - say Klout of 50?

It seems that Klout Perks have been around for more than a year, but not in Australia. It's a logical idea.

The key to success for Klout is to attract the advertisers and also to have confidence that the Klout "topics" are in fact able to meaningfully segregate. For example I've seen many people with topics like "Australia" or "Japan" - they seem a bit broad.  For example, by looking at the Red Bull Mobile website I'm not sure I am really in their demographic - me being a baby boomer? But OK it worked at least I'm talking about them!

It's also interesting to ponder why Red Bull choose this Klout Perks path, as it's little known and I wonder how many people are "Klout active" in Australia. Based on my recent observations it seems that people ARE becoming more active on Klout - I'm not sure why this is happening.

The Klout offers come with "best practice" guidelines for touting the offer to your social web friends - the Influencer Code Of Ethics, which include this:

If you decide to talk about the perk, we will ask you to disclose that you received a sample.

Please check out the Red Bull Mobile offer, and I did receive a sample - well actually I have not received it yet, I have applied for it.

To be honest I don't really need a calling SIM card, I need an iPad data SIM card! But I signed up hoping that they may have been really out-of-the-box thinkers and would give me that option - which they did not! I was also curious about how Red Bull Mobile is going about their launch in Australia.

By using Klout they are showing some innovation, so what else are they doing in social media?

If you know what else Red Bull Mobile are doing in social media please comment below.

See my Question on Quora.

Please check my topics on Klout and confirm my influence on those you choose, thanks.

Want to know how to increase your Klout score? See this Answer on Quora.

Please comment below.

Walter @adamson
http://xeesm.com/walter

Nothing social is impossible but everything is harder than it looks

"Engagement is actually a pretty complex process when you look under the hood", said Axel Schultze in a recent post at Social Media Academy.

It's a theme which has rung out from many of the more experienced social business consultants during this year. It's the realization that (a) the old advice of "just getting out there and doing something" isn't going to get you to a "social business", and (b) that engaging your own organisation needs a solid plan and actions.

Have your customers take the lead

Axel actually went further, his post called Engaging customers is actually a bad idea - that's provocative. He suggests turning the engagement procedure on it's head and facilitating your customers to first engage with you. Which means - you need to find multiple ways, and customer-preferred ways, for them to engage with you.

In order to do that you first need to know in which social places and spaces your customers and prospects and their influencers are hanging about having conversations. And that's not so simply if you have multiple brands, products, services, and you also want to check out your competitors.

Which means that before you start heading anywhere, you need to known where you are today, and where your customers, prospects and competitors are.

Planning - knowing where you are and where you want to be

Remember the "old" idea of building a solid plan to get from A to B? From the AS IS, to the TO BE, and taking into account risk and resources - I found a 10 year old pic from a PPT of mine which shows the process - on right.

That model still holds. Planning starts with an assessment of where you are in this process and where your customers etc are. As they say at iGo2Group:

A strategy is a plan of how an organisation will move from its current social assessment to its agreed business goals as it relates to the use of social media and networks to get there. Goals are key to great social strategies and they may be for sales (revenue, margin, share) or marketing (leads, programs, pipeline) or market research (monitoring, competitive, sentiment) or service (customer satisfaction, reduce service costs) or innovation (new product development, product testing, launches). But they must be tangible business goals.

So the plan is how to move from the current, to the goals. In fact iGO2 say "the most overused word in social media today is 'engage' " - better to provide benefits to customers and provide paths for them to engage and in a way which takes you towards your goals.

That then raises the question of tactics, and social media strategy and tactics are often confused.

Tactics and strategy often confused in social media discussions

Thinking of tactics as the following kinds of things, this is a complex part of the social reconstruction of an organisations processes e.g. the social penetration deep into company structures to create an engaged work force, and the creation of internal and external social communities, and education and training of employee and partner communities to leverage Social Business, for example.

That's all tough stuff in any moderate sized organisation. It requires solid thought and serious commitment and resource allocation. It's a world apart from having a few people doing what might be "great job" in some isolated unit of the business e.g. the "Twitter support team". And this is why, now, it's not really recommended to follow an "enthusiast" path to social business as that approach can't really do more than educate other early adopters. It falls short of taking the organisation with it.

In a nutshell, being "engagement ready" is a major undertaking which in itself requires serious analysis and planning, aligned with a social media strategy and the plans to channel in engagement from customers.

The social media team

Steve Farnsworth(@Steveology) wrote about this a while back, like Axel in a post with a provocative headline - Why Are You Wasting Time and Money with Radian6, Scout Labs, SM2, or Other Social Media Monitoring Tool? Steve says, after purchasing such tools the tool becomes functionally the Software as a Service (SaaS) version of Shelfware. Shelfware-as-a-service.

The main reason?

The bulk of responsibility rests squarely on the users’ lack of vision, and understanding of smart practices around implementation and adaptation, says Steve based on his conversations.

He notes that many times the tools disappear into a corner in Marketing, with a young enthusiast driving it, and that "this is a heartbeat away from saying that your nephew designed your company logo". Exactly.

Steve advocates the type of social media team that is advocated by all the experienced social business practitioners now:

... include a representative from every key department on the team to help implement your social media monitoring program, build a strong mix of skills and points of view, constantly evaluate efforts and results, and set clear goals, you have a fighting chance at making social media monitoring a powerful asset to your organization.

His readers agree - overwhelmingly - I suggest that you read the comments to his post.

What is it, again, that we're trying to do with social media?

Finally, a fundamental confusion needs to be put on the table in order to not have mismatched expectations. It's often the case that one side of a discussion about social media strategy is thinking "customer insights" and "ideas" and "sales", and the other is thinking "brand protection" and PR. They require quite different setups and socialisation, and that's why the initial planning steps and goal setting are so important. If you are satisfied with brand monitoring that's one thing, if you want to concentrate on sales leads that's another, and on innovation another.

For example, as far as innovation goes you'll need to listen out for the most wackiest conversations about your product and services - where people are doing odd things or unhappy in a "promising" way. If you're interested mainly in brand monitoring and PR you'll be listening mainly for "negative sentiment", and for sales you'll want to hear some "immediacy" in the conversation.

Then, your structures and teams and resources and executive actions will need to be tailored and aligned with each of those different objectives - whichever one you choose, or several if the organisation has the bandwidth.

So you get the idea, that to end up in the right place you need to start in the right place and know where you're heading and how to get there. That's where social media is today, and it's good to see the maturing market for proper social business consulting services.

Do you still see a rush to action prior to "thinking" in social media strategy?

What is the biggest corporate challenge today in the "how to"?

Please comment below.

Walter @adamson
http://xeesm.com/walter

Riots, recruiting and communicating with Gen Y

The London Riots, going on as I write this, for all the wrong reasons have brought to the forefront the issue of communicating and engaging with Gen Y / Millennials. In a classic case of shooting the messenger many have "blamed" social media, which is obviously the wrong target even through it may be an accelerant as Mathew Ingram points out in a well balanced review Network effects: Social media’s role in the London riots.

We shouldn't forget that social media e.g. Twitter is also being used as a moderating tool, see this, by Leicester Police:

And of course as a political tool by those wanting to jump on the political point-scoring bandwagon like John Prescott of the defeated Labour Party:

How do we use social media with Gen Y?

The overall question this all raises is something bigger - how to develop dialogues with Gen Y and sustain their participation. This is important for businesses and government sectors wanting to influence career choice.

There's a lot being done. For example Houston-based environmental management company Waste Management says that the majority of traffic to its career website comes from those who have clicked over from Facebook. Waste Management is hardly a glamorous career, and hardly a Facebook hot topic, yet Waste Management has achieved great results. The company now adds videos of current employees to its Page, and uses recruiters to speak more directly with Facebook members as part of its recruiting campaigns.

It's not just about a social presence

The bottom line - you need to be present in the same social media spaces and places as your potential candidates. That's obvious enough. But what you then need is execution capabilities, a program of contribution and engagement, and remaining active, interested and visible. And some analytics help to support the cause.

More often then not I've found that the "presence" is not the issue for larger firms and government Agencies. What is more the challenge is the internal culture, the mindset, the managment attention and commitment, and the belief that this is the real work of recruiting Gen Y and not a side-show.

In the bigger picture it is the structure and operations of the "social media team" which is the challenge. This might start with recruiting, or product development, or customer service, or marketing, or events, or sales - but the plan needs to be understood and management committed to its bigger implications and resource allocation.

Here's a tip - don't try this on your own! We used to say "just get out there into the social media and do something". But that won't work for recruiting. Imagine being recruited through Facebook by a social and engaging person from a firm or government Agency, and then discovering that when you joined the organisation (1) noone else knew or cared anything about social media, and (2) Facebook for general staff was blocked. Sorry, company policy. That's just tears for everyone.

These issues present one kind of "political / organisational" challenge - a rather big kind at that.

Where to engage - owned, paid and earned media

Another is strategic approach to where and how to engage. Although much of establishment Marketing has struggled to come to grips with social media, the paradigm of paid media, owned media and earned media is now gaining some traction.

For Gen Y and recruitment, or career engagement, we then ask where do you conduct activities across paid media, owned media, and earned media - and in what proportion for what expected ROI.

For example Brazen Careerist offers forums for young professionals to self-develop, and puts them in live conversations with recruiters. Virtual recruiting events, sponsored by a firm or Agency, would be part of an owned media plan.

Getting to Gen Y is hard work

Rebecca Ryan runs Next Generation Consulting, based in Wisconsin in the US Mid-west, a firm "primarily with companies who want to become great places to work for the next generation".

She makes the point that transitioning to this Gen Y engagement can be hard work, for example she aims to "tell the truth about what it takes to engage the next generation". And she warns: "Rebecca's message and speaking style is not for everyone. If you have uptight, change-resistant participants who can't laugh, and aren't willing to make investments in their future, please stop reading right now and google speakers who make us feel comfortable with the status quo."

The bottom line is that it takes a willingness to change, the ability to achieve change, and a commitment to move forward in new ways - and that's not for every organisation! Her blog and twitter are worth following.

The path towards engaging and, say, recruiting, Gen Y though social media isn't especially new, even if it's implementation may not yet be widespread. Heather Huhman wrote How Recruiting Gen Y Differs from Recruiting Other Generations in 2009 and it still holds true. She notes that Gen Y are regarded are considered lazy and difficult to attract and retain, yet at the same time by definition they are the future of the workforce.

So how does the existing workplace adapt to the potential new workforce? They are so different to previous generations because they are digital natives and because they have a strong sense of entitlement. Therefore, plans for engagement have to include an active presence in their digital world, as mentioned earlier, and also an important cultural shift.

Not taking offence

Those people representing firms and Agencies have to learn not to take offence at Gen Y's attitudes and behaviours in the social media, the lack of "respect" for superiors and systems and reward structures - these attitudes are all out there and active and part of being Gen Y.

The "why" and "why not" responses are not to be taken as an affront but as part of the normal thinking process of the group. Here again the social media team needs to know how to respond to this type of thinking, how to engage others in the organisation without them taking offence, and how to keep conversations alive not shut them down. This can be a confronting process and internal culture change which is needed on the part of those wishing to recruit through these channels.

Social media as a retardant

Coming back to the London Riots - could anything have been done to moderate the riots or to redirect to anger if social media had been used more actively?

Quite possible yes, and no doubt we'll see a lot more attention being paid to analysing where these Gen Y are congregating in social media, and working out how to effectively engage with them. That's not to say that the riots could have been avoided. But just as it acts as an accelerant it can also act as a retardant.

What do you have as the biggest challenges in connecting with Gen Y - organisationally?

Do you think that the biggest organisational impediment is cultural or in finding the right places to engage?

Do you think social media engagement can help moderate mass action?

I'd like to hear your opinion, please comment below.

Walter @adamson
http://xeesm.com/walter

Thanks to @wendysoucie, one of our Social Business Consulting Group team, for some heads-up on this post.

IBM's social business journey - are Partners on the same train?

@tiffanywinman wrote a good post at the IBM Software Blog to celebrate Social Media Day. It's full of impressive statistics which show how far IBM has come as a social business and the impressive number of employees who are part of this transformation. All the more need for Partners to get up to speed and to leverage and take advantage of that massive IBM investment. I see Partners being the ones dragging the chain.

I had a minor twitch when I read that IBM has been using social software for 15 years. I think that a lot of firms have been using traditional collaborative tools, but they have not transformed into social businesses - so in that sense IBM is devaluing it's own achievements in social business by claiming to have been doing it for so long.

That's a pity because they are one of the most social media savvy organisations on the planet, at the same level of social business development as Microsoft, and the very astute EMC, and the highly invested Cisco. Even though Microsoft has topped IBM in a couple of polls of social business (Microsoft tops social media savvy companies - survey), these businesses are all clustered up in the high achievers.

Social business is about reinventing customer relationships, and this also means with Partners and the channel. I consistently see that the channel is the tortoise in this race to social business, and that they fail to really and fundamentally pick up on the assets which the vendors are providing them through the social business transformation. Microsoft is focusing on partner enablement through social business as a competitive edge, and also to help move their channel partners to better understand the customer buying process.

IBM is also directing many initiatves towards Partners, to help them grow their social media skills, social media marketing skills, and social business transformation. The IBM post outlines many of these, and there's been great work done by @sandy_carter - see IBM's social media skills initiative for partners.

There are so many reasons why channel partners should connect with vendors and current customers in social media, yet, as I said, on the whole they seem slow to take advantage. I think that the push to cloud is going to accelerate the pressure on the channel to change, and especially when offers like Microsoft's Office365 start to gain critical mass. It's not a matter of if, but when.

To do that, to transform, they need a good strategy. And to develop a good social business strategy Partners need time (and resources). But luckily they have great examples in their vendors, and the smart partners will work that for everything that it is worth - and the vendors will pleased to help, it's their future at stake as well!

What's the partner maturity level in social business that you see? - please comment below.

Walter @adamson
http://xeesm.com/walter

Related post: Office365 and Partners - crisis = danger plus opportunity

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Social media strategic, but no social media strategy - report

A recent HBR / SAS survey of how organisations are using social media is worth reading. Its analysis is biased towards SAS's interests in analytics and monitoring, but the data is interesting in itself.

For example:

• 75% of companies said that they don't know where their customers are talking about them - they're missing both the advocates and the detractors;
• 79% said they are using (58%) or planning to use (21%) social media, yet only 1/3 of those had a social media strategy in place;
• 42% said social media is integral to their overall goals and strategies; and,
• 32% said social media has been designated as a high priority by their organisation's executives.

There's a lack of alignment in those statistics between the perceived strategic value of social media and the lack of a strategy. Perhaps this is an opportunity?

Where do they see this "strategic value"?

This is the $64 question, because the respondents to this survey indicated that:

1. their social media efforts were directed by marketing (69%) followed by communications, PR and the web team; and,
2. the highest ranking challenge for organisations was understanding the potential of social media to make a difference to their business.

To me, this explains why these such factors as "fully utilising social media across the organisation" and "leveraging social media insights across the organisation" were ranked quite low as the "most pressing challenges", that is not too pressing at all.

If you don't fully understand the potential impact on the organisation, and the thought leadership is limited to marketing, then those other issues would not yet have been fully considered or appreciated.

Fully utilising social media and leveraging its insights across an organisation is a very challenging aspect of developing a social business.

Perhaps that will come to the fore in future surveys, as the experience with current activities grows.

What are your key take-aways from the survey?

How would social media efforts best expand from marketing to the broader organisation?

What is your interpretation of the mis-alignment of the strategic intent and the practice?

 

Walter @adamson

Social business powers Ninefold cloud while competitors fold

Social business strategy creates such a profound shift that the competitive effects can be devastating. But you don't usually see it so starkly, and in your own backyard.

On the same day that Melbourne IT shuttered it's SME cloud offer "Melbourne IT gives up on SMB cloud" - subtitled "Not worth the investment" - competitors were ramping them up:

• Melbourne IT has told its small business customers that it is no longer interested in providing them infrastructure-as-a-service, versus
• The micro is a highly reliable, highly redundant, small memory virtual server — in an Australian cloud — for less than the price of a lunch-sized pizza a week! Ninefold release.

Why? What is the difference in strategy?

Melbourne IT chief technology officer Glenn Gore said that "the company intends ...only to offer a commercial IaaS product to large customers... Small businesses, by contrast, were not particularly interested in provisioning their own virtual servers - and in any case, the market for such customers was already dominated by large scale American offerings such as Amazon Web Services and Rackspace".

That doesn't offer much hope for Ninefold, or does it?

I was curious so I tweeted @kimota (Jonathan Crossfield), Community Manager at Ninefold who launched their cloud business in March 2011 and has seen it growing strongly since. Ninefold launched Micro Instances on the same day Melbourne IT switched off their SMB cloud service.

Ninefold's growth in this same market segment that Melbourne IT says don't want the service points to someone getting it wrong. Or at least a mismatch of business models with the segment.

Jonathan and I discussed some of the hygiene factors about success and self-service, that technology was only half the story, that you needed a complete digital engagement model, low cost of acquisition, self-management, multi-channel support, advocacy, word of mouth, low churn and simplicity. That's the true SaaS model, rarely understood so I was impressed, but not too exceptional.

On the other hand Melbourne IT's cloud efforts didn't exhibit best practice as a SaaS business model, and missed social totally.

Melbourne IT isn't an old company, or large, but in my recent experience as a customer (now ex-customer) they have a stereotype old mindset: inflexible, low agility, and a kind of mini-bureaucracy. They do things the old way, and customers have to do things their way. That sounds very harsh, but it's not that Melbourne IT has "failed", they are more the norm e.g. a very recent HBR study showed that 61% of companies "have a significant learning curve to overcome" before they can utilise social media.

I also expected Jonathon to refer to a clearer strategy, better messaging and positioning, agility, flexibility, customer engagement and superior support.

Least prepared for the shock

What I DID NOT expect to hear was that Ninefold had been built from the ground-up to embed "social" into it's whole business model and ethos. During 2010 the founders of Ninefold studied the best business models of cloud computing providers, and the best ways to embed social into everything they did.

I was dumbstruck. Not only was I ignorant of this model new enterprise being in Australia, but it was in my own industry under my nose.

The key is social media, said Jonathan, and it paid off.

What does "social media" mean - it means having a human face - people want more from a technology brand these days, they want the human face, the wider audience wants a bit more warmth, in what ever channel they choose to communicate, he added.

In contrast, it you look at AWS, people never get to speak to a human.

We don't compete on price alone, because our social business strategy offers more value than simply price savings.  

We have one team handle every communication channel. For example a customer sent us a ticket from our website, we replied by email, he twittered us back as he was on a train, and we answered with SMS. Same team, same access to all the same information, communicating in the channels as chosen by the customer.

We know that customers won't communicate only through "your" set channels, unless they have no choice. To force them to do so is the old mindset, and doesn't respect them. They want to communicate through their chosen channels, and they want a consistent response from any channel.

For us, we know social media works. We launched our whole business only with social media, in online and offline communities (the offline communities being organised online). For example we launch our beta in January 2011 with a target number of customers in mind which we hoped to acquire over a two week period. Thanks to our social media strategy, we hit that target in the first 2 hours, and went on to exceed our 2-week target by 10 times.

We aim to be in the same social spaces and places as our customers. At the moment that means Twitter, Youtube, Facebook, and Linkedin, plus a company blog to which everyone contributes, using social media to organise offline community meets, and using other social media aware outlets to publish and share content. 

Jonathan explained that although his title was "Community Manager" his real job was more about content creation and marketing - creating "scalable shareable artifacts" as he put it.

Is this a winning strategy, where Melbourne IT failed?

Absolutely, because it is founded on the power of a winning SaaS business model plus social business. This means self-serve, lower cost of customer acquisition, scalability, lower operational costs, higher retention through better service (lower churn), and leveraged word-of-mouth. It all becomes self-fulfilling to an extent, although at the same time it has to be worked on every day.

Support is a key, and that's how the social business strategy really works. It's not the multiple channels, it's the building of relationships on the customer's terms, and supporting customers to the hilt. We all know that people will praise great support, which generates word of mouth and then lower acquisition costs and higher retention rates.

On the other hand Melbourne IT has a few strikes against it competing successfully as a social business. As a customer, I experienced a mindset of making things hard for customers to do for themselves, as compared to competing services which I also used. The MelbourneIT theory is apparently that less self-serve means customers have to call, and in the call Melbourne IT has another chance to sell. Personally I think it's perverse that organisations still think this way, but I know first-hand this is their tactic as the support person I called told me so!

Not to say that Melbourne IT does not have some individuals who are very tuned in to social media and the concept of social business. Unfortunately the wisdom of these few only serves to highlight the gap between them and the total cultural transformation required to become more social.

The consequences are that MelbourneIT will find it difficult to compete in some of their "logical" market segments against more agile and socially-aware businesses, and perhaps their SME cloud offer is a good example. I'm drawing this conclusion because Ninefold is finding that customers DO want these basic cloud services, and they are not crowded out of the market by the overseas majors, in contrast to the conclusions published by MelbourneIT.

How about more nimble competition?

We're not welcoming competition with open arms, stated Jonathan, but we're expecting the global players to come here. We're not focused on them. We're focused every day on learning from our customers and in providing value beyond price, to have them totally appreciate the value of our relationship. We suspect that the global entrants will focus on price, and that's why we are shifting the conversation to the relationship, to being human, and to providing exceptional value. As I said before, social media is key to that, he added.

Fantastic! This is an exciting business story for all Australian businesses. Think about social business, from the ground up, and you have new opportunities. And it's a warning to those businesses who are "the norm" - like Melbourne IT. In this case Melbourne IT was attempting to enter a new market and failed. That's a marginal failure. It's when a more nimble social business sets out to capture a competitor's core business that the tears will really flow.

Cloud prospects

In wrapping up, I asked Jonathan about the prospects for cloud computing, and the impact on internal IT, and he told me:

1. the prospects continue to exceed our expectations, they are far broader than even we first thought, we're excited;
2. IT departments are facing a choice - to pretend that the cloud isn't happening, with certain consequences, or to embrace it to provide a better, more responsive service. We're seeing the progressive IT groups and business units rapidly adopt cloud for development and for testing.

Social business has definitively arrived in Australia, and it's a pleasure to find one built from the ground up on these principles and demonstrating real competitive success.

What social business success stories do you know of, that are not well known?

How has social business led to competitive success?

How can you change a lethargic old-mindset company into a social business?

Walter @adamson

PS Except for the quotes the views expressed here are uniquely my own and weren't discussed with any other party with whom I am associated. I don't own shares in Ninefold or any company associated with it, nor in MelbourneIT.

How social business exposes relationship marketing as an Emperor with No Clothes

Since the early 80s Marketing has taken a turn towards "relationship" marketing and such things as "lifetime customer value". However this "value" is still transactional-based.

The kink in the road toward relationship marketing was a reaction away from immediate transactional value towards creating and measuring long-term net gain based upon superior customer satisfaction and benefits.

The trek to "relationship marketing" has been a long 30 year journey, and it still rates a conference spot. See for example Session Three of the upcoming "annual Miller Heiman Sales Performance Summit for sales leaders" where the National Australia Bank is presenting: "Transformation Time; Paul Freeman, Head of Capability Business Banking of National Australia Bank, will present on their journey to become a World Class relationship bank".

The concept of the relationship model has been highly successful, as we all take this for granted as Business 101 these days. Or perhaps it was always obvious but was glorified and codified by Marketing theorists seeking the next swag of publications and seminars?

Marketing professionals resisting social business

In any case, although the business community broadly accepts this relationship model as a given, ironically there is still a strong resistance about social media's role in this among the marketing professionals and more-so the Marketing Professional groups with which I am familiar.

There is some kind of turf resistance while they try to figure out how to "professionally" own this space. For example up until now the Australian Marketing Institute Annual Conference has had zero content on the topic, and although there was some this year it was at the level of "Facebook campaign success stories" - the epitome of transactional relationships.

Relationship marketing is about transactions over a longer time frame

Now here's the thing. This "relationship marketing" and Customer Lifetime Value (CLV) still focuses on transactional value - it's just a form of discounted cash flow of the lifetime events of a customer as they relate to probable transaction capture from those events. The marketing "edge" is as simple as this - to be at the right place at the right time for those typical lifecycle events - drip feeding at the right reading of the tea leaves. The "relationship" part is a view of a different time frame - long-term versus short term, not of different forms of customer valuation.

Relationship marketing is still just about focusing on the customers with the highest lifecycle sales possibilites.

New forms of customer valuation are required

But, what we know today is that new forms of customer valuation are required, and many organisations are reconsidering how they determine customer value. They are recognising that instead of focusing on revenue or profit associated with an individual's or household's transactions, that they need to start to think about the value of influence and collaboration.

Understanding a person's social reach combined with their propensity to share thoughts becomes a method to extrapolate value, and in turn to help update segmentation rules and adapt relationship strategies.

The relationship wanted is the relationship of the social medium

But here's the catch - these very same customers want and expect a different kind of relationship with the companies whose products and service they buy. And it's not easy to predict what those expectations are - for some it may mean a deeper relationship extending to business innovation and for others just a more efficient buying experience with little or no product enquiry or interaction.

Fragmented social business isn't going to work

To know which suits which customer segments it is imperative to track and understand holistically across the organisation the influence, referrals and collaboration of the customers in their social spaces. That's no easy task because very few organisations today deploy this holistic social business management.

This need for a holistic approach to social business implementation and customer relationships is a recurring theme in the drive to increasing customer value today. For example in social media customers need to be treated in the right way, they need to be interacted with and engaged in the right way, and different arms of the organisation need to be fully aware of the nature of the interactions, if not the detail.

For example if the new knowledge gleaned from successful social engagement leads to more efficient segmentation then the appropriate parts of the organisation for that specific segmentation need to take a coordinating role, otherwise value could be destroyed.

It's a complex business. And it requires serious top-down support, and serious cross-organisation implementation and measurement. It's not about a support team of 4 people in an organisation of 4,000 people servicing the squeaky wheel tweeps.

Takes proper business planning not more staff monitoring

It's a truism that the growth of social media has put the customer in a stronger position. Anyone can have a voice and everyone expects “human” near-real-time responses. Organizations operating without improved customer value metrics are hiring staff to monitor and respond to virtually everything – which is difficult to scale – not only because of the sheer volumes of activity, but the risk of having inconsistent responses or staff that are untrained in the art of risk mitigation.

What they really need is not a rush to operational solutions, but proper business planning and strategy. It will most likely require the services of a solid management consulting group, skilled in complex organisations, industry sectors, project management and organisational change. It's not a "call center up" initiative. And to be frank it's not something that can picked up at a marketing conference or from Facebook campaign award nights.

Bearing in mind that most complex enterprises already have ways and means of successfully coordinating cross-functional activies,then this provides a lever for the transformation to a social business and more extensive measurement and action around enhanced customer value.

Real change requires top-down support. The business case for investment should be about the extent to which new customer valuation insights can help the organization to compete more successfully. That means integrating customer engagement across the organization, not developing a silo directed at social media.

What is the new valuation metric?

However if we are talking about Customer Loyalty Value rather then Customer Lifetime Value then perhaps we are starting to embrace some of the new valuation metrics made evident through social business using social media. Unfortunately "loyalty" programs have all but degenerated into very broad direct marketing programs so we might be best to dispense with that term. In which case we need a new term, and of course new measures for customer lifetime value.

For example traditional CLV models use variations of "propensity to purchase" in their mathematical calculations, and it typically is related to recency of last purchase. Internet marketeers know that the very time a customer has just purchased a product from the web is the best possible time to offer them something else - the upsell. In the offline world it is similar - the upsell of extended warranties on home appliances at the point of sale of the latter.

However do we now need to measure not the recency of last purchase but also the recency of last significant interaction. This could be via contact with an influencer, a high value collaborator, a review on a website, a comment on Facebook? This is where we need a new addition of Berger & Nasr's classic "LIfetime Customer Value" - one of the most cited books on the topic. In fact if you refer to their book you'll see how directly transactional their mathematical models are.

Adding in social metrics is a whole new kettle of fish. What that really means is that adding in social metrics would for the first time turn the traditional CLV "relationship marketing" equation from one based on transactions to one which incorporate measures of relationship! 

How do you re-envisage customer value?

What non-transactional measures are the most important for a social business?

What would the new Customer Lifetime Value equation look like?

What is the greatest organisational roadblock to implementation new CLV measures?

Walter @adamson

Social business and enterprise agility

There is always a danger in birds of a feather flocking together, because it can lead to group-think - a lethal corporate disease! But the connection between the social business and agility is a pet theme of mine and I was therefore immediately attracted when I saw that Ray Wang retweeted this, this morning:

rwang0 R Ray Wang RT @rossdawson: How the social enterprise drives differentiation

THAT caught my eye, and @rossdawson's post even more so because he recounted that although he had been saying for a considerable period that differentiation was the outcome, he was now focusing more on flexibility as an outcome of social enterprise.

My own hobbyhorse whenever I came in contact with execs or teams implementing "knowledge management" was to ask them why? Nine out of ten times they only had internally-focused answers, usually self-serving and mostly products of the project generating a life of its own.

I was always searching to see if they considered the prime outcome as organisational agility - giving the ability to move faster and to beat the competition. That's what my narrow-minded view saw as the only useful outcome of "knowledge management", but it never came up in these conversations.

Social enterprises can achieve that flexibility, and perhaps that's what I mean by agility. The ability to act in response and anticipation of the market. Even if that comes down to "just" effective continuous improvement I think that would be a huge advantage for most businesses.

We know that social business transforms relationships with customers, and that's about getting closer, better feedback, better service etc, and also about the company being able to use that information to actually change - being agile. So this idea of flexibility/agility through the social enterprise is very plausible. Whereas to me I never, in all my contacts, found it plausible or at least not achievable that "knowledge management" was going to be anything except another burden and overhead.

Coincidently, the same @rossdawson post has a paragraph about gathering and responding to feedback. Perhaps the subject of another post but only this morning I was laying out the case to a client as to why they should be using something like Get Satisfaction as opposed to their web developer's old FAQ system - I call it FAQ 1.0. My argument was essentially that Get Satisfaction isn't about FAQs, it's about customer service, connection, interaction, crowdsourcing, involvement and engagement. That's not what you get from FAQ 1.0 - not unless you have at least the $8.2m and 30 people that Get Satisfaction has focused on this one issue.

Of course if you have an inflexible organisation then FAQ 1.0 will be sufficient. But if you are a social enterprise then your systems need to support your transformation to agility.

Do you see any difference between agility and flexibility?

Is active continuous business improvement within a social enterprise enough to keep it on top?

How strong do you see the connection between the social enterprise and agility?

Walter @adamson

3 Reasons to put Business back into Social Business

Three reasons to get "business" back into Social Business are: to manage its risk, complexity and cost as a major project initiative; to ensure it fits with business strategy and informs it from customer strategies; and, to ensure that it is effectively operationalised.

Getting "business" right is a pre-requisite to getting the use of social media right. The notion of Social Business (in the new for-profit sense) has evolved from discussions over the last couple of years that started with social media and evolved into such things as "social business design".

Social media in business was a prosumer innovation

It should have been the other way around - from goals to objectives to plans to actions, and using appropriate methodologies and tools along the way. But social media was a prosumer innovation - bringing personal tools into corporates, as was blogging only 5 or 6 years ago.

With everybody having now taken a deep breath, it's clear that companies with good culture, customer relations, products, services and innovation will succeed without social media, but they will multiply their own positive attributes via social media. For companies that don't have their act together, social media might well make things worse, in a number of ways, or at best just be a distraction. 

Social business has grown out of the effects of social media. We're now putting "business" into social business in order to get the cart before the horse.

Moving from social media to social business is a complex process

No news here. We've learnt that moving from social media to social business is a complex process, and even more so where the enterprise doesn't start from a clear coordinated strategy and culture.

As @deswalsh recently noted:

It’s one thing for a small firm to develop and implement a social media strategy, and even on a small scale there can be challenges, such as in terms of skill sets, organizational culture, time management issues, budget and accountability. At the enterprise level the challenges can be much more daunting.

So the #1 reason to put business back into social business is to be able to manage the risk and complexity (and cost) of the undertaking. This is done by consistent methodologies and training, and recognition of the way enterprises work and like to work on these kind of initiatives, by using people who are familiar with corporate behaviour.

Shaping business strategy in unison with social and customer strategies

Umair Haque wrote in From Social Media to Social Strategy that "Social media strategy fits inside a marketing (business, corporate) strategy, and is shaped by it. Social strategy fits outside business and corporate strategies, and shapes them. Social strategies are about rewriting the logic of the industrial era entirely, shifting gears in how we think, envisioning a broader, more powerful, more challenging use of social tools."

Social Business accepts that social media strategy "sits inside" a business strategy ( you could say it is one of the strategies supporting the goals and objectives of the business). And it is also informed and shaped by "social strategies" and in particular customer strategies.

The means of shaping business strategy in unison with social and customer strategies is the #2 reason that business needs to be put back into the social business which has evolved from the social media end. This is the business ability to look across the landscape of the business, the landscape of customers, to envisage and to innovate, and to know what will work and now work within the client enterprise. It's what good business consultants do, and they work within a framework.

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3 Reasons to put Business back into Social Business
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Social business as a going concern

The #3 reason to put business back into social business is that the business - as whole - needs to be running all this when the consultants leave. The whole business needs to know why, have clarity of purpose, consistency of execution, and mutual commitment to each other and each department to each other, and to gain it from the customers.

This is the operational result. This isn't achieved through campaigns or any one department "getting" social media and social business, no matter how great the result. It's achieved through hard work of the consulting team, the client's team, and the various collaborating parties. Again, the frameworks and the interfaces and the measures for these complex activities need to all become institutionalized - this is the business of project implementation and change management and technology selection and integration. Social media per se isn't driving this success.

Consolidation of social business consulting groups is accelerating

There aren't many groups in the world, yet, who can provide this kind of service - to really put the business into Social Business. There is a consolidation and I wrote about Brian Solis joining Altimeter. I'm a Cofounder of the Social Business Consulting Group #sobizco and we are also representative of the consolidation.

2011 is the year in which more groups will merge and emerge, and Social Businesses will very clearly emerge as a new competitive force. We know, from Altimeter, that most Social Strategists and their programs lack maturity, with "only 23% of Social Strategists having a formalized program with long-term direction".

These new business-oriented merged consulting groups will help corporate Social Strategists develop a proactive program that gets ahead of the demands, and operate from a strategic planning position. This will ensure that they don't "fall behind in requests from vocal customers and internal business units", thereby becoming reactive and what Altimeter calls the "Social Media Help Desk".

Bringing proper program planning, shaping business strategy in unison with social and customer strategies, and having commitment and consistent execution are all keys to successful Social Business.

What do you think are the most important forces shaping Social Business in 2011?

Do you see a future for larger business-oriented social business consulting groups?

Walter @adamson