Revisiting the Connected Agency

In February 2008, I co-authored a Forrester report called The Connected Agency with Mary Beth Kemp (who is now at Ogilvy in Paris).

At the time, we observed that different types of agencies faced different challenges:

  • Traditional agencies were stuck in mass media mindsets
  • Digital agencies understood interaction but lacked branding chops
  • Specialists were creating new silos instead of integrating

Our solution was a model called The Connected Agency, focusing on three key shifts:

The Connected Agency

This prescription was based in no small part to the shifts underway in the digital marketing and social media landscape. While we didn’t get the answer entirely right (i.e. that agencies would integrate with communities), the shift from blasting out push messaging to facilitating consumer experiences is well underway.

Coincidentally, four years later my colleague Dave Gray wrote a book called The Connected Company. His take on why the future is podular:

If you want an adaptive company, you will need to unleash the creative forces in your organization, so people have the freedom to deliver value to customers and respond to their needs more dynamically. One way to do this is by enabling small, autonomous units that can act and react quickly and easily, without fear of disrupting other business activities – pods.

The future is podular

A pod is a small, autonomous unit that is enabled and empowered to deliver the things that customers value.

Six years after The Connected Agency, I think it’s time to revisit the model and incorporate the lessons learned from years of social business design.

IBM bankrolls a new $100M #CX unit. Will it work?

IBMiX

Yesterday, IBM announced expansion plans for its Interactive Experience professional services practice. The numbers align a bit too perfectly: 10 new labs, $100M investment, and 1,000 new roles.

#IBMiX

While the numbers sound great, here’s what matters:

  • Access to technology. Brands need to connect with customers along all points of the buying/loyalty loop, same as it ever was. But today, engagement is impossibly inefficient without the help of technology. On the front lines, high tech enables high touch experiences. We could always assume that IBM services had access to the firm’s leading-edge research and this announcement includes specifics regarding influence analysis, intelligent customer profiles, and customer identity resolution, in addition to behavioral pricing, life event detection, and psycholinguistics analytics.
  • Global scale. In addition to four Experience Labs in North America, IBM adds 10 locations that provide presence on all continents with the exception of Africa and Antarctica. This allows the firm to match the operating needs of multinational clients, in addition to collecting local insights that can be transferred to broader programs. For example, consider the social media ecosystem in China, which has influenced the roadmaps of Silicon Valley-based platforms (and vice versa).
  • Ability to sign talent. Finding great talent that can pair campaign creativity with quantitative analysis is difficult, and constrained supply drives higher prices. IBM can afford to poach talent from other firms, as evidenced by its hires from Accenture, Wunderman, SapientNitro, DigitasLBi, CapGemini, and Ogilvy. IBM is the professional services equivalent of the New York Yankees.

But I wouldn’t consider the game over yet by any means. In fact, some of these strengths come with significant challenges:

  • Legacy branding. International Business Machines has a world renown legacy in enterprise hardware and the current software organization is also well-known. These groups capture the public’s attention with innovations like Watson and support of the US Open, which can lead to consulting business. However, internal corporate relationships could lead buyers to lean towards other firms that may not carry a perception of bias towards proprietary technology solutions.
  • You don’t have to be the biggest to be the best. Consider the change that technology has driven in the agency landscape; the traditional agencies with roots in the mad men era have been increasingly displaced by smaller shops that are nimble and can react to shifts in current culture. IBM claims to be a “new breed of service provider” but it must be careful that the positioning doesn’t become a Napoleonic mistake of creating competition on too many fronts. Moreover, IBM needs to operationalize knowledge from its global network without letting its sheer size get in the way of learning.
  • Fast enough? IBM isn’t alone in seeing the marketing opportunity around digital customer experience. Two years ago, Deloitte acquired Ubermind to create Deloitte Digital. Last year, Accenture acquired Fjord and formed Accenture Interactive. Good help is hard to find in this market, which is why SIs are buying digital shops to get in the game quickly. IBM has been hiring talent from the right places, but this one-at-a-time approach may not be a fast enough ramp, leaving money on the table for competitors.

IBM sees the market opportunity in customer experience and appears committed to winning in the market. There are a couple of elements in this announcement that take me back to 2008 as I launched my last company — “a new service provider that’s agency + consultancy” and a multi-million dollar funding commitment — and the emerging opportunity seems to be wide open. If nothing else, IBM is signalling to potential clients and hires that they’re open for business as the “social business” era fades into the next generation of digital transformation.

What’s beyond social business?

Let’s face it. Great brands need to be thinking about what’s beyond social business.

Social Business

You might be thinking, “Wait a second…the social business era has just begun!” And if so, you’d be correct…

Let’s rewind it back:

  • 2003 – 2006: Early Adoption. Professionals viewed social media with curiosity and kept an eye out on the trajectory of corporate+consumer engagement. Despite early brand experiments like Randy Baseler’s Boeing blog, most companies were skeptical of the long-term impact of this emerging media/technology. However, some unlucky brands would eventually have no choice but to participate, as detractors used new outlets to broadcast their dissatisfaction – and mainstream media amplified the discontent. Early adopters including Charlene Li, Steve Rubel, and Robert Scoble explained to the world what needed to be done. 
  • 2007 – 2009: Early Majority. Brands decide to get involved. They’re getting educated, listening to consumers using new technology, rolling out internal collaboration platforms, and starting to consider how to integrate “social” into existing operations. However, as the global financial crisis caused the world to slide into the Great Recession, budgets were slashed and program momentum stalled. The silver lining to financial meltdown? Brands had to get clever with what they had on hand and also had time to think strategically about integrating social into their businesses. Thinkers like Jeremiah Owyang, David Armano, and Chris Brogan help move brands, big and small, put pieces together and move forward. I identified over 300 brands using social media marketing.
  • 2010 – 2012: Mainstreaming. Budgets start returning to brands and technology adoption starts to hockeystick. The term “social business” becomes increasingly adopted and companies go on record to report return on investment from their initiatives. The pace of social technology acquisitions and IPOs picks up as investors seek to monetize their bets. Social business leaders including Scott Monty, Michael Donnelly, Richard Binhammer, and Bonin Bough have pioneered the creation of corporate social media teams and the presence of this construct is now common for most brands.

So what now?

Social business certainly still has a way to go. Many brands still lack coherent strategy and tactics for coping with two-way engagement, not to mention internal change management. However, the trail has been blazed by pioneers like IBM, Coca-Cola, and Dell for others to follow. The mainstreaming of social business will continue throughout 2013, as brands focus on scaling programs externally and internally. Emerging challenges like SoMoLo (social/mobile/local) will occupy attention even further. Most approaches are focused on building four of five capabilities outlined by Umair Haque: singularity, sociality, spontaneity, and synchronicity. I see this playing out primarily in employee education and consumer engagement, with a focus on training, tools, and measurement.

But what’s beyond social business?

Solving for social at scale requires implementation of solutions for today, not tomorrow. That’s delivering on mainstreaming.

Along the way, the concept of “social business” risks losing meaning, similar to the reductive definitions placed on originally expansive concepts like BPR and CRM. Is the pinnacle of social business success equal to the presence of robust two-way communication? That’s difficult for many brands and a step forward for sure, but ultimately limiting. It’s only focused on plateauing on the top of the social media S-curve.

It’s critical that brands position themselves to participate and potentially own experience ecosystems. In a world of increasing connectedness, brands must employ a holistic point of view with regard to consumer relations, employee collaboration, and value chain management. This requires thinking through communications and how they’re aligned with products and services.

“Social” describes everything we do, but technology always underpins the change. As Deb Schultz has said: technology changes, humans don’t. The rise of social business has not been about figuring out humans – it’s been about how people and companies use new technology to communicate, transact, and entertain.