The known, knowable, and the unknown

When I was in business school, my strategy professor Jeanne Liedtka introduced a framework for strategic thinking that I use quite often, based on Fitch’s paradox of knowability:  any issue can be broken into three distinct parts:  the known, knowable, and unknown.

This may seem like a simple framework, so let’s apply it to something you understand pretty well, like your company.

There are things that are known.  But knowledge can be difficult to distribute.  In theory, markets are transparent; in practice, today it’s nearly impossible to tap into the collective intellect of an organization’s ecosystem (i.e. employees, suppliers, customers).  It takes good tools to capitalize on the known.

There are things that are knowable.  Research can help convert these into the known.  Building bridges and opening communication conduits can help unclog knowledge arteries and spur information flow as well.  It takes the right process and culture to be successful.

And there are things that are unknowable.  Time is often the only solution here.  But as Pasteur said, "chance favors the prepared mind."  Having the right strategy and structure in place will ensure your company is ready to embrace and act on whatever outcomes emerge from the passage of time and introduction of new market data.

So maybe not so simple after all.  You can apply this to social technology adoption, evaluating a job opportunity, or trading for Manny Ramirez.  Decisions are rarely black and white, but using a good filter will help you eliminate as much grey as possible.

Now’s the time, the time is now

Today is my last day at Forrester Research.

On Monday, I’ll officially be joining Jeffrey Dachis to build a new company focused on enterprise social computing.  You may have heard about this venture a few months ago.

Why am I leaving?  Because I believe this new company offers both professional and personal growth opportunities.  I’ve learned a lot at Forrester over the past 2.5 years about effective writing and public speaking/presenting; along the way, I’ve won internal “Best Research” and “Top Keynote” awards.  And there are other skills I’ve acquired elsewhere that will now be put back into play, e.g. strategy formulation, project management, technology development, and budget/staff management.  Now I’ll refine and develop new skills like business development and entrepreneurship.

Things are going pretty well for me at Forrester. George Colony is one of the smartest CEO’s I’ve worked for.  At Forrester, an analyst can reinvent her/himself and stay refreshed, challenged, and engaged.  So now, sitting near the top of my 2nd career development S-curve at Forrester is a great time to contemplate both internal and external directions – from a position of strength, affording time for patience, introspection, and due diligence.

That contemplation has led me to my decision to ramble on.  My work experience includes a lot of companies you may recognize:  General Electric, Prudential Securities, Deloitte & Touche, Arthur Andersen, Coopers & Lybrand, Andersen Consulting, Fidelity Investments, Razorfish, PUMA AG, Stride Rite/Keds, and Forrester Research.  So why join a company that has yet to be named, without decades of brand history?

Because I believe the market opportunity is huge.  And we get to build this one exactly how we want.

At a macro-level, businesses must adapt to a new world of work.  As digital-born natives enter the workforce and all consumers assimilate new digital behaviors, organizations have no choice but to evolve from their legacy operational models, built on principles from the industrial revolution.  We are now in the social revolution – a Groundswell of change.  The idea of “command and control” has been turned upside down and the enterprise must avoid being crushed by the inverted pyramid.

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.

We will be hiring, partnering, building, and advising in the near future.  If you’re interested in working with us to help change the world of work, email jobs at dachisco.com.

Should we talk about the weather?

Twc
I’ll admit that I’m a big fan of the Weather Channel.  I’ve got two channels at home (regular and weatherscan), web bookmarks for frequent travel destinations, and two mobile bookmarks (regular and iPhone).  Earlier this week, the brand/channel agreed to an LBO of $3.2 billion, less than the original target of $5 billion, and will be managed by NBC Universal.

I’m not in the weather business (just a fan), but I think this deal makes sense beyond the eyeballs and ad revenue that media outlets seem to be reporting on.  See, earlier this month at one of my speaking gigs, I had lunch with someone from NBC, who gave me a different perspective on this [potential at that time] deal than what you may be reading about today.

Before we go there, let’s take a step back.  The other buyers involved were Time Warner, CBS, and Comcast.  Two publishers and a MSO moving boldly into content.  So NBC seems to fit in the former category.  But that’s only a slice of the picture.  From a media perspective, adding the Weather Channel makes sense, but their problem is that consumers don’t spend a lot of time spent on site/channel. However, they get lots of eyeballs, meaning lots of ad impressions/revenue.  (An old/traditional model way of thinking.  In other words, doomed.)

Back to lunch.  So we’re talking about weather and advertising and some of the possibilities when you combine the two.  Like an airline with banner ad inventory that could show skiing ads to someone who looks up a ski destination, or a Caribbean vacation ad to someone seeing snow in the forecast.  [yawn]

It would take a whole lot of uber buttons, 30" spots, and mobile text banners to make that $3.2 billion pay off.

Who’s NBC’s parent company?  Oh yeah, General Electric, the world’s largest
conglomerate.  So here’s where things get interesting.  The potential value behind the Weather Channel lies within using its data to improve all of the other businesses within GE.  Sure, all of those advertising applications are interesting, but there’s a lot of money in helping the transportation, energy, aviation, finance, etc. businesses more intelligent by better understanding the weather and how it impacts businesses on a current and forecast basis.  (Get the Corporate Audit Staff on this one right away, Jeff.)

At least that’s the opportunity, "weather" or not its full potential is realized.  I wonder, is there any data that you have hiding in plain sight that could help dramatically improve your business?  It could come to you as simply as making small talk about the weather.

It’s what’s on the inside that counts

This isn’t going to be a long post, although I’ve been thinking about the subject for a while.  I could probably spend the next few years on the topic, so instead I’ll keep it brief for now.

The use of social computing has evolved over the past ten years (c. Cluetrain) and hockey-stuck over the last four.  Now blogs are the "new traditional" social media, morphing from their early ugly duckling status into slow-moving and elegant swans (overtaken by higher velocity, short-form channels).

But a small problem is starting to emerge along with the mainstreaming of social media.  Although there’s a lot of talk about it – and more businesses feel the need to do something about it – most businesses are not internally prepared to make social media work.  I see this quite a bit when I’m working with clients, reflected in the questions I am asked:

  • What happens if we accept customer suggestions but then don’t make any changes?
  • Why doesn’t our blog have any comments?
  • How am I supposed to formulate a strategy when our IT policy blocks access to social media sites?

Growing up, I must have heard the phrase "it’s what’s on the inside that counts" about a thousand times as I searched for an identity.  Today, brands are experiencing growing pains as well, figuring out how to create relationships with their customers.  And they’re discovering that they need to understand how these things work before engaging successfully with the outside world.

We have hope, because individuals within firms have personal social
media experience – and more enterprises are waking up to the fact that
they need to put resources in place now,
because just like e-commerce 15 years ago…social media isn’t going
away.  Instead, it’s becoming the new way that things work.

Otherwise, brands co-opt social media and fill microblogs, RSS readers, and social networks with clutter, interruption, and irrelevance.  Same as advertising ever was.

An Agency’s First Step To Getting “Connected”

When queuing up this entry, I noticed that there’s no category for "agency" related posts.  That’s OK because Mary Beth Kemp, my colleague and co-author of The Connected Agency report, has taken the lead on a new Forrester blog called Agency Futures.  So I’m cross-posting this, there.

A lot needs to happen before agencies get Connected.  The clear first step for most shops is building digital acumen.  So I’ve published a new piece called "Agencies Must Build Digital Skills To Survive" – pretty much to the point, eh?

Here’s a [long] excerpt:

Traditional advertising agencies — marketing services providers that
have built global brands through mass media — need to prove their
digital mettle now more than ever. Although late 90s startups like
Scient, Viant, and ZEFER flamed out, firms like Critical Mass, Organic,
and Avenue A|Razorfish have risen high above the dot-bomb wreckage and
are well-positioned for success today.

Clients are shifting business to digital shops, and consumers have
turned away from media channels that built the agency industry and
toward emerging Internet media. Ad agencies must build new interactive
competencies quickly in order to succeed. How? They must build digital
skills with a three-tiered approach of establishing digital commitment
at the executive level, retraining existing staffers, and building a
pipeline of future talent.

So what’s the secret to success?  Hire a chief digital officer?  Tell all your staffers to get on Facebook?  Go 2.0 with your web site?

Maybe all that and more…

P.S. Our Forrester Marketing Blog Feedback Survey needs your feedback just like that first cup of coffee Monday morning.

Some smart money bets

I had lunch with Cue Ball Group last Friday, a Boston-based VC firm.  You may be aware that there’s quite a bit of money out there sitting on the sidelines.  So I’m interested when I hear where people are placing bets and why.

Here are some of the portfolio companies we discussed:

  • Miniluxe (think Starbucks meets nail salon)
  • Cruxy (if MySpace had kept it real)
  • Knovel (it ain’t sexy but it works)
  • Epic Burger (soon to open in Chi-town South Loop, organic burger joint)

And some interesting ideas they’re keeping tabs on:

  • 23AndMe.  For only $999 discover to whom you’re genetically linked.
  • radiusIM.  Think Twitter with GPS.
  • Naver.  A Google-killer in action – it’s the localization.

Cue Ball was founded by Tony Tjan, who founded digital strategy firm Zefer back in the dot-boom; Red Herring wrote a case study series on them.  Not sure whatever happened to the other management team members.

Notes on Luxury – Giorgio Armani keynote

LuxuryI was in New York this week for a couple of events related to the Luxury Interactive conference.  This morning’s keynote address was delivered by Bridget Ryan Berman, CEO of Giorgio Armani.  Her message to the audience:  "Customers are in control."  It’s a mantra that most of us have bought into (well, more or less) – but it’s one thing to hear from the CEO of a FMCG company and quite surprising to hear this from the CEO of one of the world’s preeminent luxury brand portfolios.

Berman’s draws on experience from Federated/May, Ralph Lauren, Apple, and Armani:

Federated:  You must be on the retail selling floor.  It gives you the opportunity to speak directly to the source – an unfiltered pipeline to consumers.

Ralph Lauren:  A brand that brings experience to life.  The intent: to evoke an emotional response to detail, e.g. Ralph designed it or has the piece in his own home.  Backbone of customer intimacy and authenticity.

Apple:  Dedicated store space to customer activities, instead of traditional product-focused merchandising.  Lets customers experience products for themselves – empowers them, gives them control.

Armani: Mining global customer CRM; tons of existing data that had never been used.  Enhancing the retail experience by focusing on physical space and customer/associate interaction.  Aligning brand and customer perception.

Berman says she realizes that the next generation are quickly becoming "power consumers" and has started setting up the company for future success.

Digital Agencies at ARF re:think

Rethink_2
The second panel of the day at ARF’s re:think conference was "The Agency of the Future" including R/GA, Avenue A|Razorfish, Nitro and Digitas.

Continuing on the one-of-these-outfits-is-not-like-the-other theme, Nick Law, Chief Creative Officer from R/GA shows up in short sleeve shirt, jeans, and swooshes in stark contrast to other panelists in standard business casual.  Interactive is the new traditional and its agency executives appear to have followed suit, so to speak.

Get it?

Followed suit?

Ok moving on, Rance Crain of Ad Age did a nice job of moderating and stirring up the pot.  He suggested an alternative title for his panel as well:  "Digital:  Just Another Silo?"  BTW, I’m guessing he’s not a big fan of subservient chicken, either.

Torrence Boone of Digitas described his company as a "full service agency" with roots in direct marketing and capabilities today in integrated and digital marketing.  Which is a good thing because I’m planning a Forrester Wave on integrated agencies later this summer.  Torrance defined a big idea as a filter on what to do or what not to do.  It’s built out of consumer insight, media context, and consumption patterns, along with a good dose of gut and intuition.

Steve Marrs of Nitro spoke about his company’s small size and global reach.  They have three main offices, in London, New York, and Shanghai (the largest).  Shanghai as largest is intriguing (unless I heard wrong).  Steve said that his agency approaches work by separating strategy from advertising – the way it used to be.  Nitro defines a big idea in part as something that drives business results.  Note to Nitro:  a good place to start would be SEO for "nitro."

Clark Kokich of Avenue A|Razorfish described his company as a "full service interactive advertising agency."  He mentioned that he’s been in the agency game for a long time and left his first stint because of a feeling that what matters to client businesses happens inside the core of their firm – untouched by agency projects.  He brought this focus back to AARF to focus on what’s "crucial to the client’s business."  Clark also mentioned that his agency’s purpose is to drive business results, because "you can’t build a brand through advertising." 

Nick Law of R/GA showed how the "Agency of the Digital Age" is helping one client – Nike – beyond advertising.  Their work on Nike+ gets deep into product as well as promotion – these being "wearable, networked computing devices."  Not much more to say, because Nick showed how R/GA is doing it.

These agencies are certainly well-positioned for the future, especially given the way consumer behavior is shifting to digital.  However, as interactive agencies compete for strategy work, they are going to run into formidable competition – traditional management consultancies.  We’ve been here before and last time the old guns won.  This time around…?