Digital Transformation: easy to say, hard to do

Digital: where we’ve been

Ten years ago, I wrote the post coining the term “social business” to describe a growth opportunity for brands beyond social media strategies at that time. Dion Hinchcliffe and I eventually wrote a book to unpack the concepts, illustrated in this graphic:

social business design

Today, “social business” has reverted back to its original meaning within the non-profit/philanthropic community, while social media for business has folded into the broader scope of digital media and marketing. But brands still need help and the current hot term for the changes needed is “digital transformation.”

The key drivers of yesterday’s “social business” underpin today’s digital transformation, having evolved over the past decade:

Technology

  • Mobile devices are more powerful than ever, but Moore’s law has plateaued and Apple and other manufacturers are seeing upgrade cycles slow down. A decade ago you might have been hanging on to your Blackberry for the full physical keyboard; today you’re hanging on to your iPhone 7 or 8 because new features aren’t enticing.
  • Broadband connectivity at home is widely available, leading to mass adoption of smart home technology. Searching online for knowledge used to mean opening a web browser on your desktop computer and typing words into a search engine. Now Alexa and Siri are a conversation away from completing your quest for knowledge.
  • The cost of physical data storage has gotten as close to zero as profitably possible. Conference tchotchke USB drives used to be so awesome, with 4 or even 8 MB of storage. Now you can get 5 GB of free cloud storage along with your mobile device that could land an Apollo spacecraft on the moon.

Society

  • Online sharing has become commonplace and some people have made a living out of the practice. Ask kids today what they want to be when they grow up and many will answer, “a YouTuber.” Social media isn’t just for sharing consumer service frustrations and conference updates; it’s how the world gets its breaking political, economic, and entertainment news.
  • Millennials have not only entered the workplace; in many cases they’re running the show. The oldest millennials are almost 40 years old and carry expectations for their work and world around them, which may not align with institutions that are grounded in the values and beliefs of a different generation. The result has been cultural change; witness #MeToo and Brexit.
  • “It’s not information overload…it’s filter failure.” This groundbreaking insight from Clay Shirky in 2008 describes how the internet’s minimal cost for publishing and distribution resulted in too much irrelevant information online. Now we have filter failure of an entirely different sort – our newsfeeds are finely tuned to provide very narrow streams of content that are personalised, monetised, and politicised.

Work

  • When we thought through social business design in 2008, the world was bottoming out in the Great Recession. Since then, we’ve seen a historic bull market run and collateralised debt obligations have returned. Fewer businesses are operating with a burning platform but those that are – e.g. UK retailers with widespread physical presences – discover that underinvestment in social business design was a mistake, as new market entrants are more closely connected to consumers and winning in the new world.
  • The open office plan has been exposed for its true purpose: cost-savings. New studies show that productivity and employee dissatisfaction drop in open floor plan offices. Startups didn’t have or want to spend money on the non-essentials, so they went with open space. Enterprises spin the open plan as collaborative and agile, but walk around an open office in New York or London and you’ll see the majority of workers wearing headphones – it’s because open offices kill productivity. Save money on hard costs, lose more on soft costs.
  • Long live email! Email used to be maligned as the place knowledge goes to die, but lives on due to regulatory requirements, budget constraints, and unwillingness to change. Messaging apps like WhatsApp, Kakao, and Discord play an important supporting role, even if not officially supported by the IT department.

where are we now?

So the world has gotten more wired, consumer and employee expectations have risen, and businesses face increasing pressure from new market entrants that face lower barriers to entry. Many brands now look to digital transformation as the solution, with dreams of quantum computing, self-driving cars, and augmented realities.

But let’s be honest. All executives know their companies could get better at digital, but individual compensation schemes and corporate shareholder expectations aren’t structured to allow for proper time and investment into the hard work and deep cost of a true transformation. It’s easy to say “transformation” but the hard work and political commitment to make investments can take years to become reality.

Thus, we end up with fragmented efforts across departments, whether marketing, product, or operations: a campaign with a great sharable hook, but no CRM; a product with so much potential for connectivity, but no integration; or a system “upgrade” that takes years to implement that nobody wants to use because their consumer experiences are years ahead.

WHERE DO WE GO FROM HERE?

Getting digital transformation correct requires a commitment to change. It requires a holistic approach to people, process, and technology. WHY and HOW it happens depend largely on strategy that’s specific to situation:

  • How do we create and sustain competitive advantage?
  • What unique capabilities do we have?
  • How can we manage financial commitments?
  • What do we do and not do?
  • What is our timing?

In the next ten years, no one will be surprised to see hundreds of well-known brands go into administration. Outdated business models obscure the critical changes needed to deliver the contemporary experiences that consumers, customers, and employees expect. The winners will understand how to invest early and judiciously, turn assets into advantage, and harness evolution in work, society, and technology.

My take on the Sprinklr acquisition of Dachis Group

What a long, strange trip it’s been.

It’s a good fit; the core Dachis Group principles of social business design fit well with the Sprinklr concept of social experience management.

I’ll write more on the future later, but for now I’d like to take a look back. Over five and a half years, we built the world’s largest social business consultancy, completing six acquisitions, expanding to nine cities, and employing over 250 people. What a long, strange trip it’s been.

Dachis Group Come Together I

In July 2008, here’s what I wrote about what we were setting out to do:

Over the past two-and-a-half years I’ve been focusing on two major concepts: social computing and customer centricity. They fit very well together; becoming “socially successful” today requires that companies use process and technology to facilitate internal and external alignment. Your market is calling for this in a voice that gets louder every day. Unfortunately, many companies try to ignore what they’re hearing – and I see an opportunity in helping enterprises listen, learn, and take action.

Our yet-to-be-named firm will help companies and their new leaders unlock value from social computing within the enterprise, driving customer-centricity and effective engagement. The evidence of success will be found in culture and profit.

The core concept that resonated with our clients and drove the growth of our business was what we ended up calling “social business.”

The end game should be an entirely social business. Not just point solutions to improve existing processes or programs – new ways of connecting and collaborating. Business models will change. Customer-centricity becomes a moot concept, as “us” and “them” no longer exist.

We were successful in helping spark a global movement. In the beginning, we had to fight to win remnants of marketing and IT budgets. Today, businesses understand the need to shift into social business and have devoted hundreds of millions of dollars to prepare for the future. With the successful acquisition of Dachis Group, our part in the story of social business comes to a close and becomes part of a new emerging narrative.

I learned plenty of lessons along the way about myself and others. About SaaS and services. About winning business, retaining business, and losing business. About founders and employees. About hiring people and firing people. About VCs and bankers. About spending money and saving money. About acquiring and being acquired. I don’t have stories about private jets and private concerts, but I do have plenty of direct experience in helping companies engage their ecosystems and become better prepared for business success in the face of the information revolution.

Thank you to everyone who’s been part of the Dachis Group journey: our clients, employees, alumni, investors, business partners, and supporters-at-large.

Is the Social Business Gold Rush Over?

For businesspeople, the lesson learned is repeated over and over again: as a class of participants, it was the outfitters (e.g. Levi Strauss) that made big money, not the prospectors.

In U.S. primary schools, children learn about their state’s history around third grade. In Georgia, they hear about James Oglethorpe and settement by convicts. In Texas, they learn about a rocky relationship with Mexico. In California, they read about the 19th century discovery of gold and take field trips to pan for any remaining traces in the northern hills.

 

Yosemite National Park

 

As adults, most of us have an abridged understanding of the gold rush story — accidental discovery, influx of prospectors and displacement of native people, and the eventual naming of a pretty good NFC football team. For businesspeople, the lesson learned is repeated over and over again: as a class of participants, it was the outfitters (e.g. Levi Strauss) that made big money, not the prospectors.

It’s amazing to think about this story and watch the dynamics play out again in social media.

If you care to join the conversation, click here for more information on a webinar happening tomorrow.

 


Can brands be human?

Is it any surprise that brands, no matter how hard they try to “humanize” via social media, are never allowed to succeed?

Seeking Shambhala

 

“I’m only huuu-man / Of flesh and blood I’m made / Huuu-man / Born to make…mistakes…”

— “Human,” The Human League, 1986

One of the biggest supposed benefits of social media has been its potential to “humanize brands.” You should know the story by now — the world of brand marketing is filled with one-way communication, where institutions fill airwaves and fiber optics with unwanted commercial messages. Social media enables brands to improve on the wasted spend of traditional messaging by allowing direct consumer engagement for business purposes.

For example, we celebrated the way JetBlue handled their Valentine’s Day crisis with adept use of social media. On the other hand, we use the same channels to complain about brands and their lack of understanding. All in all, we expect brands – and the people operating their social media accounts – to engage in personal, colloquial conversations. To act human.

However, our society has a long history of denouncing institutions: goverments, religions, corporations. Social media has empowered individuals with voices and given that consumers love to hate advertising, is it any surprise that brands, no matter how hard they try to “humanize” themselves via social media, are never allowed to succeed?

Last Wednesday, I saw many people post stories on Facebook of where they were on September 11, 2001, using the hashtag #neverforget. That day some brands – and the people operating the accounts – took to social media to acknowledge the tragic events that happened that day. I didn’t see any criticism of people’s stories or Instagram photos — but I did see plenty of criticism of the posts from brands. Most of criticism called out implicit commercialization of the tragic events of twelve years ago.

Most of these brands weren’t trying to be a jerk like Kenneth Cole, who deliberately tries to profit from the suffering of others. These brands – and people – were just trying to be more human…and many people hated them for it. Whether necessary or not, AT&T Chairman and CEO Randall Stephenson posted a public apology for his brand’s tweet — a very humanized response.

It’s difficult to know the exact intent behind each of the brand posts — commercial or not. But what’s clear is that consumers hold brands to a different standard in social media communications. For years, brands have been advised to use social media to be more “human” — but it seems to me that consumers will never let that happen, no matter how hard brands try.

 

I originally published this post on Medium.

 


 

McKinsey Global Survey results show it’s still early days for social business

Are “branded applications and games” — which have an almost identical level of adoption — are as good as social media at driving customers through the funnel?

McKinsey released new data this week in the study “Bullish on digital: McKinsey Global Survey results.” The top line takeaway is that more businesses are using digital technologies to engage customers.

However, take a look at the fourth line in the table below:

 

Bullish on digital: McKinsey Global Survey results

 

“Engaging customers through social-media channels before, during, or after a sale” — acquisition, preference, and retention. Could it be that “branded applications and games” — which have an almost identical level of adoption — are as good as social media at driving customers through the funnel?

I think not.

Social business still has a long way to go.

 


 

Social Business: It’s what’s on the inside that counts

Customers are connecting. Are you?

Social business is mainstreaming. Most companies have figured out that social media can help build consumer relationships, especially when integrated with marketing campaigns. However, social media marketing still falls short when brands fall back to a stance of being a monolithic logo communicating in corporate-speak. Recent kerfluffles involving Chipotle and Bank of America demonstrate just how much consumers dislike being reminded that there’s actually a wizard behind the curtain.

Fewer companies have embarked on the aspect of social business that creates sustained business value, requiring a greater degree of difficulty to achieve: internal social business. The guideposts to creating value are hiding in plain sight but many brands lack the self-confidence to allow their employees to act as public brand ambassadors. According to Forrester Research, “only 41% of respondents in a recent corporate survey believe their CEO is setting a vision for brand building across all consumer touch points.”

After all, when the media loves telling the stories of how rogue employees at Domino’s, Taco Bell, and Subway have embarrassed themselves and the brand, the natural corporate reaction is to lock down, not open up. These public gaffes get magnified in part because the brands have little in the way of an advocate base to defend the brand, thus the signal broadcasts loud and clear.

Companies would be wise to inspire employee advocates as a counterweight, before crisis hits. Buy the air conditioner BEFORE the heat wave or the generator BEFORE the snowstorm, not after, when prices are marked up and inventory is impossible to find.

Forrester recommends that brands enlist an army of brand advocates:

Forrester: Enlist An Army Of Brand Advocates

As with any initiative, success with employee advocacy requires attention to people, process, and technology. The first two aspects are touched on above; the third covers an emerging market with tools that can create powerful leverage for brands when placed into the hands of the right users. That is, users who are trained with the right mindset and operate within the boundaries of a brand-appropriate set of policies and guidelines.

Easier said than done, right? Social business may be mainstreaming, but it’s still early in the phase. Businesses need to look past the external hits and misses of social media marketing and focus internally to unlock long-term sustainable value.


MIT Sloan Management Review and Social Business By Design

MIT Sloan Management Review: How Companies Can Move Past a Trough of Disillusionment in Social Business

We are well into the mainstreaming of social business. In this interview with Robert Berkman of MIT Sloan Management Review, my Social Business By Design co-author Dion Hinchcliffe discusses how “companies are at a stage of disillusionment with social business, but building social media literacy, integrating initiatives, and connecting social tools to how work gets done will help ensure success.”

More: MIT Sloan Management Review: How Companies Can Move Past a Trough of Disillusionment in Social Business

The truth is out there

What is the capital of Tajikistan?

Is there life on Mars?

Who will win the 2013 World Series?

All knowledge falls into one of three categories: the known, the knowable, and the unknown.

Now, think about measuring business results in social media.

Getting to the knowable in social business

On one hand, this is an easy task. You can purchase Twitter ads or Facebook ads and gain access to analytics dashboards that will show how your investments are performing. In a focused, closed-loop situation, measurement is easy. Results are known.

On the other hand, this is a very difficult task. “What’s the ROI of social?” can generate retorts like “what’s the ROI of putting your pants on?” In an unfocused, overly broad situation, useful measurement is impossible. Results are unknown.

Somewhere in between is the knowable. By starting with business activities, brands can focus on what needs to be measured and why. Good places to start include advertising campaigns, customer advocacy, and internal collaboration. Results are knowable – but measurement is easier said than done.

If you can measure it, you can manage it

Determining social business performance requires a deliberate approach. The setup and delivery of campaigns require use of proper tools and process to monitor and measure activity. In today’s operating environment, the availability and sophistication of tools are increasing, but there’s still plenty of manual labor that goes into filling gaps where existing solutions fall short. Inefficient and incomplete approaches allow only part of the complete picture of business performance in social to be seen, while the rest remains obscured, in the realm of the unknown.

Six months ago, I left Dachis Group and eventually joined R/GA to help the agency build a capability to support the next nine years. Learning from Bob Greenberg and Barry Wacksman was an incomparable experience and I left every meeting inspired and full of ideas.

This week, I rejoined Dachis Group, the company I helped start in 2008. Why? After a cordial meeting with Jeff to catch up during the holidays, I was pleasantly surprised by the progress that had been made during my absence. The tools are the most advanced offerings in market today and continuing to evolve.

I also realized that the challenges that Dachis Group is solving for – how to help marketers make social business work – are the same challenges that have been driving me ever since I joined Forrester Research in 2005. These issues were initially unknown at the advent of corporate social media; identifying the knowable and moving clients into the known is immensely satisfying for me. That’s why I’ve been blogging for over seven years, co-authored a book and speak at conferences worldwide to exchange insights. So I decided to return to the company and help continue to grow what I started. 

The truth about how your social performance is out there – the results are knowable, as long as you’ve got the right solutions to measure and manage your efforts. In my new role – Chief Solutions Architect – I’ll be helping Dachis Group work with clients to drive better business results.

The illusion of individual vs. institutional control

“Where ignorance is bliss, ’tis folly to be wise.” – Thomas Gray, 1742

“I always feel like…somebody’s watching me.” – Rockwell, 1984

This month’s Scientific American contains a feature called The Story of Grand Central Station and the Taming of the Crowd. If you’ve ever been in a public transportation terminal at rush hour, you know that commuters expect the crowd to flow. In fact, when people disrupt flow intentionally or not, it causes issues. When a friend of mine first moved to New York, he told me how he used to stop to let people pass, which was courtesy in the south. The result was that other people had to stop moving as well, impeding flow, and making people angry. No wonder JetBlue hired a Broadway choreographer to help redesign JFK’s terminal 5 – flow is critically important.

Grand Central Station

Well designed spaces facilitate better outcomes. In the case of transportation terminals, passengers move freely and avoid congestion. Within a business, employees are able to access resources easily and work more efficiently. Organizational design applies to both physical and virtual spaces.

The Physical Space

Many of today’s physical office spaces are designed with a panopticon-like layout. In most spaces, seniority dictates who sits on the outer edges of the office, with junior people closer to the center. This classic Japanese style and most workspaces follow some variation. Managers occupy offices around the outer edges of the workspace, just as foremen occupy desks high above the shop floor. Thus, workers in the center can never be certain if or when they’re being monitored.

Spontaneous opening of some bottles of bubbly in meeting room 3

Same goes for conference rooms, which are technically shared spaces. Most companies will nickname a conference room “the fishbowl” because of transparent walls and prominent focal location. Physical layouts are often described with adjectives like “collaborative,” “open,” and “flat, just like our org chart.” What they’re really designed for is institutional control.

Let’s go back to The Story of Grand Central and the Taming of the Crowd:

“This design…preserves the Crowd in a central area, providing raised balconies from which there are plenty of opportunities to people-watch. Being placed on display is not lost on the subconscious of the Crowd: what appears to be hustle and bustle are manifestations of many synchronizations happening at once…These items add perspective to the Crowd and diminish its psychological power as an uncontrollable mass.”

How often do you hear an executive throw out the “people are our greatest asset” cliche? Humans run every business out there and the larger the company, the larger the crowd that needs to be controlled.

The Virtual Space

But we’re in the social business era now and corporate office environments are evolving. We have coworking spaces, hotelling, and telecommuting. Emerging software enables online collaboration and enterprise evangelists encourage everyone to “work out loud.” That is – increase operational efficiency by using tools that facilitate collaborative publishing and editing, getting valuable content out of woefully siloed email inboxes, “where knowledge goes to die” as they say.

Empty inbox

Most companies consider the Crowd to be external to their payroll. The unruly masses are the billions of social media users who seek customer support, get excited when a brand tweets back, and have the power to make campaigns go viral for better or worse. The external Crowd is impossible to control and many companies thus restrict their employees from participating in social media, even when wholly contained inside the firewall.

By doing this, companies lose opportunities to not only drive productivity gains but also manage more effectively by exterting greater control. Not all employees relish the chance to work out loud – they’re the ones who are wary of being monitored. Other write this hesitation off as paranoid – working out loud is liberating! Exciting! Collaborative! 

Managers would be wise to tap into this zeitgeist and build a business case to support blissful ignorance. By putting an internal Crowd control design in place via process and technology platforms, the organization would better prepared to mobilize towards common outcomes rather than allowing behavior to evolve unchecked.

ACL 2010: Day 1

Put another way, which is preferable: having employees burning hours by skulking off to coffee shops to vent with colleagues, or having data and analytics available to provide quantitative employee insights or safe, well-lit places out of the public eye for employees to vent qualitative concerns – before they hit Glassdoor or other word-of-mouth sites?

It’s a manager’s job to control the crowd. Bad managers attempt this using brute force. Good managers understand how individual vs. institutional roles should be orchestrated to best effect.