Marketing Influence & Thought Leadership

British Petroleum Begins a New Era of Responsibility for NGOs

We all need and consume oil, and the myriad of products spawned from its ecosystem. We all share in the risk of exploiting it, some more directly than others. And then there are those neighborhoods (next to the refineries) that absorb more risk than others. And then there are the oil companies that take on the risk of exploitation, but in the case of BP we are learning about worst practices in risk management, governance and compliance, not best practices.

British Petroleum’s lack of governance and risk management combined with our own government’s absence of regulatory compliance and oversight marks the beginning of a new era.  In this new era governance, compliance and corporate social responsibility will be driven primarily by non government organizations that are the voice of the people. It has become brutally obvious that large trans-national corporations can’t govern themselves, and more importantly the collaboration between them and governments, (in this case the oil lobby) facilitates an environment of risk and recklessness in the management of natural resources.

After experiencing a near collapse of our financial system, we know now what a joke Sarbanes Oxley has become and that the government regulatory apparatus completely failed.

The hard truth is that our government is challenged to:

·         Manage our natural resources and fisheries

·         Manage our financial system

·         Manage our healthcare system

·         Manage and/or regulate the safety of our food supply

·         Manage or control our borders

British Petroleum is a trans-national corporation active in thirty countries with more than 22,000 service stations and sixteen refineries, and they upstream 2.3 million barrels of oil a day. BP reported 2009 revenues of $239 Billion, a profit of $14B so why can’t they manage their risk and govern themselves, they certainly have the resources?

BP’s Code of Conduct

“A fundamental BP commitment to comply with all applicable legal requirements and with high ethical standards”

I copied the code of conduct from their overly green and seemingly environment friendly website, but there is something about this statement that says who they are. Compliance with all legal requirements, hum what does that mean? Well it means that they will go only as far as the law of any country requires and not further. This is in essence is their problem; they need to go further than applicable legal requirements in the high risk and “high profit” business they run. Compliance with “high ethical standards” is about as vague as you can get and we know they vary with culture, country and company. So what BP is really saying is that we only go as far as we need to and we don’t go the extra mile because it might affect profitability and this is further reinforced by the following quote from their CEO Tony Hayward.

“We are responsible for our operations and we are accountable for setting and observing consistent and high standards within them. Our code of conduct, for example, provides clear expectations on behavior and compliance.”

I had a higher view of BP until the disaster in the gulf exposed their lack of governance and risk management. BP put up $500 million for a bio-fuels research center at the University of California at Berkeley and that is great, but now they have a PR and brand disaster of unprecedented magnitude on their hands. And in my view they have fueled the fire so to speak by setting up a live feed of the well leaking for weeks on end. Perhaps some good will emerge from this when all oil companies take a call to action and re-examine their risk management and governance across operations.

Enter the NGO

Non Government Organizations like the World Wildlife Fund and the Natural Resources Defense Council have now been put in a position of power and truly have the opportunity to be the voice of the people because government has failed. Those who oppose egalitarian groups and view them as zealots and extremists in some ways will rethink their role in world business. Like Exxon, BP will recover from this event and we can only hope they will live up to their responsibility in this terrible environmental disaster.  NGOs now have the power of social media at their disposal and we know that NGOs and many non- profit organizations are harnessing that power to gain influence and audience.

As a student of at the University of Massachusetts College of Food and Natural Resources I learned about the management of our planet’s resources and was taught that there are three principal approaches to managing natural resources:

·         Preservation

·         Conservation

·         Exploitation

 In the beginning many egalitarian groups advocated preservation of natural resources which was and is in direct conflict with the exploitation of our resources, the management approach still prevalent today driven by our capitalist system. This put NGOs at great odds with government and industry and their radicalism challenged many people including the scientific community. Times have certainly changed as NGOs now are important players in the global economy and can significantly impact brand reputation through their influence.

Conservation of natural resources employs management practices that enable the resource to be sustainably harvested and maintained for our children. This means that resources are not irreversibly damaged like our fisheries populations, many of which will never recover from over-harvesting and exploitation. In the case of oil, it is not a sustainable resource; there is only so much of it on our planet. That does not give license to energy harvesters to haphazardly manage operations and put other natural resources and industries at risk, such as fisheries and tourism. NGOs have a greater responsibility than ever in ensuring that large multi-nationals and governments are looking out for the best interest of their people. Join an NGO today and make your voice heard, your state senator, local representative and/or government may not be looking out for your best interest, unless of course you are in California where our governor  Arnold “just said no” to just drill baby and off shore drilling!

Further Reading: Why We Hate the Oil Companies, by John Hofmeister

 

 

 

 

 

 

The Economics of Social Business

I have asked Natalie Petouhoff to join me in writing this week’s blog post. Natalie was a leading CRM analyst at the Forrester Group and I enjoyed meeting and spending time with her at the SCRM conference with the father of SCRM Paul Greenberg in Virginia. Natalie gets it and has teamed up with a colleague to create new models and metrics to measure the economic impact and business value of being social business. As you all know I am always on the bleeding edge of everything in whatever industry I am in and I am excited about participating in Natalie’s research.  I also think that this will be a thought provoking post.  In my section I have identified the economic pillars of social business; Natalie will provide us with some insights on how we might measure the impact of social media on the bottom line, so here goes.

The social media tsunami is disrupting and impacting many aspects of business today including product development, CRM, thought leadership, corporate marketing, sales and lead generation, brand management and influencer relations. Defining and understanding the economic ramifications of its impact is the question of the hour? B2P companies have been quick to adapt to this disruptive change in communications and have already begun to leverage it for competitive advantage, but most B2B companies have been slow to react and engage. What are the parameters that need to be measured and by what metrics?

The Economic Pillars of a Social Business

·         Product Development-Innovation is now outside in.

·         CRM- managing the challenging social customer.

·         Thought leadership-business leaders can engage and drive influence by engaging.

·         Sales and lead generation-is easier than ever in volume.

·         Brand management-you can’t hide.

·         Influencer relations-they now own you and your brand.

 And how is social media impacting business?

• Impacting call centers and what are the added costs or cost savings?
• How are companies recruiting and training social media savvy employees?
• How many companies now have swat teams following Facebook pages and Tweets about their company, products and service?
• How are companies engaging with the new influencers (bloggers) and managing their brand?
• How are companies engaging with the new influencers and managing their influence?
• How are companies creating content pertinent to their industries and establishing thought leadership from within?
• Are Facebook fan pages effective means of advertising and lead generation?
• How are companies and organizations building communities of interest to enhance their brand experience?
• Will advertizing on Twitter pay off?

In Reality

Proctor and Gamble is using social media to drive product development and test pricing, Ford is using it to build communities around car launches, SAP is using it to accelerate innovation, software development and integration in its ecosystem, Indium is leveraging its blogs to establish thought leadership in its industry and engage new customers, and it seems like every winery in California now has a Facebook page.  So how are they measuring the business value of social media and how should we think about it?

Measurement by Natalie

 

The way that I approach measurement is first start with how you are currently measuring success in your business. What are the benefits of what you are doing? When you look at those benefits, what metrics do you use to know if something has improved or gotten better?  And then ask yourself, "What the value of that "something" if it gets better-- i.e., what does it add to the bottom line? 

The tricky part is to then apply social media to your business and know what the affect it’s going to have on it. That means really understanding your current business and the value conversations and also learning something new... i.e., the benefits and value of social media to traditional disciplines like marketing, PR, customer service, product development.

In working on ROI models, what I found was that when a company fully engages in social media, it sort of doesn't matter where they start. If they are really paying attention -- listening and interacting, what they will find is information that is critical to every single department. That kind of listening is new for most companies -- i.e., they are used to pushing content and information out... and not really getting a lot of feedback... In essence, doing social business means change. It means changing how you listen, how you measure, how you respond and howyou run your company. Some companies "get" it and others... they may never understand this new world!

 

Ratatouille & Why Small Businesses Fail + Sea Mice in Deep Basins

Remy

According to the latest statistics from our Small Business Association two thirds of small businesses survive two years, and only 44% survive at least four years. So that leaves us with more than half of all small businesses failing in the span of four years, ever wonder why?  I think a major reason is simply poor communication with customers and lack of sales engagement and expertise in the product or services area. Brian Head, Economist with the SBA Office of Advocacy, noted that the latest statistics are a much more accurate assessment of new business success rates, and that "as a general rule of thumb, new employer businesses have a 50/50 chance of surviving for five years or more." I found this information at business know how along with a their seven reasons for failure, which I don’t necessarily agree with: http://www.businessknowhow.com/startup/business-failure.htm

The Seven Pitfalls of Business Failure

1. You start your business for the wrong reasons.

2. Poor Management

3. Insufficient Capital

4. Location, Location, Location

5. Lack of Planning

6. Overexpansion

7. No Website

During the course of my career I started, cofounded and/or joined six small businesses and I don’t agree that small business failure can be attributed to these seven pitfalls only. In my experience knowing, understanding and engaging with customers to understand their stated and unstated needs is the key ingredient for success. There is no question that if don’t have the right location for your business, you don’t plan, you over expand and don’t have enough money you probably will fail and deserve to. Aren’t these all key management decisions? There are of course many people that have life style business aspirations and need to limit their businesses growth, and start businesses for all the wrong reasons. But today if you are not selling products over the Internet, my question is do you need a website if you are on Facebook? I would love your comments on this.

Engaging Customers

How many times have you walked into a small business and felt ignored? And how many times have you walked out of a small business without making a purchase because of this? I think this is one of the primary reasons why so many small business fail, lack of marketing and sales engagement by employees and small business owners. I also think that merchandizing of store windows and products within small business is another reason for failure. If the products and store doesn’t look inviting and products aren’t well presented in the signage then why should I go into the store? We are visually oriented beings and our journey begins with our eyes, although the nose can play an amazing role. 

Last weekend I went wine tasting in Sonoma County California with friends and visited a number of new small businesses in Healdsburg, a small quaint but up and coming town. Clustered around its center square are bookstores, wine shops, specialty gourmet stores and art galleries. One business, a new cheese shop in town looked inviting and we I walked in. Upon entry I saw a small figurine of Remy, the famous rat from the movie Ratatouille. There were two people behind the counter and no one greeted us upon our entry, it wasn’t until I picked up Remy and asked if he was for sale that the person who appeared to be the owner spoke to us. Even then she did not seem friendly or engaging, and did not do what would seem obvious to me, tell me where she got Remy and ask me if there was something special I was interested in. Not at any time was there an engaging conversation started and they never asked us if we needed any help, which I think is a stupid pedestrian question in this day and age.

Net/Net

When I walk in your store, don’t make me feel like a stranger, engage me even if I am a visitor to your town. Make me feel like I am welcome and you are not doing me a favor by talking to me. Small business owners need to carefully select employees with engaging personalities that will foster a business personality and environment that drives sales. In any business the customer experience or what modern marketers call “the brand experience” begins before you even enter the door, but in my mind it’s all about communication. All of this sounds like common sense, but it is the biggest challenge in retail today. Communications and engagement are only the first step the second and most valuable is expertise. And if you are a cook and have not seen the movie Ratatouille yet do it!

The Personality of Fish: Sea Mice in Deep Basins of our Oceans

 

Along the Eastern seaboard of the Northwestern Atlantic Ocean there are a series of deep basins often more than 2000 meters deep. Some have been named after early bathymetric scientist/explorers such as Wilkinson, Tilles and Stellwagon. These basins are unique ecosystems that are inhabited by bizarre looking animals and plants that spend their lives living in the dark. The fish and invertebrates have highly evolved chemo and olfactory sensory apparatus that enable them to find food, reproduce and survive. They are part of an ecosystem rarely seen and/or explored even with ROVs, (remotely operated vehicles) and this is where I encountered the sea mouse.

As a marine scientist I volunteered to do ground fish surveys up and down the Atlantic seaboard, where we often encountered, the sea mouse, Aphrodite aculeate. Sea mice are actually segmented worms and slowly cruise along the bottom like vacuum cleaners scoring the surface. I never had the opportunity to dissect one and examine their stomach contents, but I can imagine that is was a strange mixture of detritus, mud and other dead things. We often used Yankee Otter trawls to drag up everything from these basins and what I remember very vividly was the distinctive almost noxious smell of these animals live in the dark.

My favorite flounder species, the grey sole flounder can be found in these basins, along with perhaps the most disgusting of all fish species, the Hagfish . Hagfish are eel like and live inside dead things like some fresh and salt water eels. When the nets are emptied out comes the hagfish and as a defense mechanism it surrounds itself with a thick and absolutely disgustingly thick mucous and slime that reeks of the basin depth. Grey sole was a highly sought after fish because of its delicate and unique flavor. However, its populations have been decimated by overfishing of the basins, and because of our ineffective and dysfunctional government management systems. Until next time I wish you great selling and marketing in the millennium. 

Silo Busting is Key to Achieving the Customer Centric Enterprise

Data, data everywhere, but no one knows where it is or how to find it, let alone use it to create a customer centric enterprise. Organizations and companies are so siloed they can’t get a 360 degree view of their customers. They are so siloed by politics, organizational structures, culture, poor data management and resistance to change that they can’t help themselves. The age of the data warehouse and the single subject data mart has passed but still we can’t see all of our customer’s data. Why? We have sophisticated data analysis tools that include predictive analytics and even OLAP, but we still can’t see the customer. And now there is the promise of In-memory data bases, which may enable and real time data mining of online transaction processing systems. This is certainly something that everyone has wanted, but will this enable us to see all of our customer’s data? I sincerely doubt it.

On Friday my Internet went down and I had to call COMCAST, unfortunately they had to send a technician. The technician called me but did not know what he was being sent out for, he didn’t have my data. My DVD player died during the week and I went to Best Buy and got a new one. They offered me a three year line of credit on a new TV without interest, but they wanted me to fill out a credit application. Are they for real? I have purchased products from them every year in cash, they should know who I am, don’t you think? Why don’t they don’t who I am, they had my data did they lose it?

It has been almost three years now since I began my sixth startup experience, SAP’s Business Influencer Group, (BIG). BIG is the second startup I have attempted in a large organization, the first was Gartner’s G2 Group a technology research unit focused on industries. SAP’s BIG and Gartner’s G2, however, have come with all the challenges that startup people face in a large organization; achieving high levels of business velocity and the inability of people to look at things differently and adapt to change.

My first visit as Head of the BIG group was to Harvard Business School where I met one of today’s most important academic influencers Ranjay Gulati. Ranjay researches everything customer focused and in May of 2007 he published an HBR Spotlight Article on Customer Focus, Silo Busting: How to Execute on the Promise of Customer Focus. As you might imagine, I spend a great deal of my personal time keeping up with important academic research that aligns with our company’s business initiatives and I think that Ranjay’s Silo Busting research was well ahead of it time. For anyone involved in anything customer related this article is a must read and I think it is one of the most undervalued articles I have come across over the last three years.

 

 

Ranjay’s Four Cs of Customer Focused Solutions

In Silo Busting Ranjay profiles Jones Lang LaSalle a commercial real estate provider, Cisco, General Electric’s Medical Care Systems, and interestingly enough Best Buy. Ranjay invented a seemingly simple approach to creating a systemic customer centric enterprise, the four Cs.

Coordination-Cooperation-Capability-Connection

The four Cs might look simple at first but making it happen requires that scary word, change. And there needs to be top down support for anything like this to even have a chance of surviving in any organization or company. I won’t go into them in detail, but his four Cs span, the realms of change management, technology, organizational culture, metrics, training and knowledge management. I would think for many organizations this would be a best practice in becoming a customer centric organization and I think it’s one of the reasons why Ranjay is now a Harvard professor.

Silos of Data Prevent Customer Focus

Enter me the social customer. As a social customer I expect business and all organizations that I interact with to know me. And no I don’t want to join their fan page on Facebook. I want them to know me, and interact with me in a way that demonstrates this? Those companies and organizations that demonstrate this will get my business and interactions. Those that don’t will be out of mind. I am a social customer and I want you to be prepared to interact with me in the way that I want to, and most likely in the future that will be through my smart phone or IPad. Don’t put my data in a silo where no one can see it! Use it to make me the social customer happy and engaged. 

Is the Social Media Bubble Bursting, or Will The Tsunami Continue?

According to Umair Haque, Director of the Havas Media lab,  the social media bubble is about to burst, here is an excerpt from his post on HBR March 23, 2010, “I'd like to advance a hypothesis: Despite all the excitement surrounding social media, the Internet isn't connecting us as much as we think it is. It's largely home to weak, artificial connections, what I call thin relationships.” You can read the full editorial and it is actually quite an interesting myopic look at the new world of Internet communications: http://blogs.hbr.org/haque/2010/03/the_social_media_bubble.html?cm_mmc=npv-_-WEEKLY_HOTLIST-_-MAR_2010-_-HOTLIST0329&referral=00202

What is most fascinating about this post is that he tries to draw a connection in the form of a metaphor on the subprime loan business? Quite bizarre indeed if you think about it, the subprime loan scenario evolved from the perfect storm of:

·         Giving anyone a loan that could fog a mirror.

·         A spectacle of American greed where banks and investors were not and are not being held accountable even today, so much for Sarbanes Oxley.

·         Digitization of mortgage loan origination systems where loan processing leveraged business process management software to take loan processing time down from months to less than several days.

(There were business rules engines in the BPM systems that could easily kick out those with low credit scores, but somehow they were tweaked to let those less worthy in.)

I simply don’t get this metaphor, do you?

Trust Enters the Global Social Media Landscape

All right lets attack this hypothesis. The customer is king and has just been given a new pen that moves at Internet business velocity and the only thing slowing down the social customer’s influence (word of mouth marketing) are time zones. One of the issues that Mr. Haque argues is that social media sites lack trust, well that may be the case for some sites that are blurring the lines between our personal and professional lives, but they are not creating fake thin relationships in my world. In fact we decide to enter into them and they are bringing us closer to our friends, past friends and relatives that we still want to know more than any other platform. In the business world we know exactly how social media helps to bring us closer to our customers and how they are leveraging the platforms to drive change.

One of the key findings from our SNCR research last year was that professionals do trust information and relationships on social media sites. This is key for any business and for many companies it’s all about influence because trust is the foundation of influence on the social media planet influence flows like water, it’s everywhere. This is why I always say that social media is the new word of mouth marketing. In several of my previous posts I have demonstrated how P&G, Indium, Kodak, SAP and others are gaining competitive advantage through social media. Is your company leveraging social media to their greatest advantage?

Why the Internet is the Greatest Innovation of Our Time

When Proctor and Gamble decided to build a social network of more than six hundred thousand mothers, do you think they were worried about trust? Probably not, but what they did was build and leverage a social network to build their brand and get competitive advantage. This is a story best told by the most social customer of us all Paul Greenberg, the inventor of Social CRM. The Internet has not only connected us in ways that are innovative and great but from an anthropological standpoint it is melding the cultures of the world.

As a member of the WWW conferences I had the pleasure of working with many early Internet pioneers who would have never predicted the social media tsunami. At the time we were still babbling about how a protocol standard called TCP/IP had just created a global area network called the Internet and debating the nuisances of stateless vs. stateful protocol streams. Remember that this was just sixteen years ago. For those of us that have gray hair we remember how Microsoft fought the Internet and would not endorse this routable protocol even though theirs wasn’t routable. Wow times sure have changed, but guess what, now I am a social customer, author, participant and B2B marketer.

·         I don’t think my relationship with the hundreds of people that read my blogs each week is weak or fake.

·         I don’t think that sites like YouTube are a fad.

·         When I don’t like something in a business I go Yelp about it.

·         When I need information I do a search.

·         Before I buy a product I do a search.

·         My sales friends are using Facebook and LinkedIn to do “digital hard rock mining.”

·         When I need to find old friends and relatives I go to Facebook and most of them are there and I don’t think my relationships are weak.

·         When I join a professional group I go to LinkedIn.

·         When I watch baseball now it’s on the IPhone with MLB.com.

·         And today I did not join 304,059,724 against Obama's Healthcare takeover.

·         I would really like to know how the Havas Media lab positions itself as a platform for a new kind of strategic advisor that helps investors, entrepreneurs and firms experiment with, craft and drive radical management business models and strategic innovation.

 

Net/Net:

The Internet has rapidly expanded to become a global network of seamlessly connected computers and devices that has revolutionized information sharing and communications, challenged governments, broken down cultural barriers and driven innovation and business velocity to levels never before imagined. One of the most important successes of the Internet is how it is enabling globalization and more importantly business model innovation. Today’s most successful companies are driving product and business model innovation from outside their own walls by leveraging the Internet as a collaborative community building platform. This platform has allowed organizations to harness the innovation power of the community and not just individual innovation.

There are many that would argue that many of the enabling technologies that drive the Internet and Web 2.0 today have been around for some time. The reality is that we are finally leveraging their potential in new and exciting ways, there is more to come, because the Internet is all about innovation. 

Is the Social Media Bubble Bursting, or Will The Tsunami Continue?

 According to Umair Haque, Director of the Havas Media lab,  the social media bubble is about to burst, here is an excerpt from his post on HBR March 23, 2010, “I'd like to advance a hypothesis: Despite all the excitement surrounding social media, the Internet isn't connecting us as much as we think it is. It's largely home to weak, artificial connections, what I call thin relationships.” You can read the full editorial and it is actually quite an interesting myopic look at the new world of Internet communications: http://blogs.hbr.org/haque/2010/03/the_social_media_bubble.html?cm_mmc=npv-_-WEEKLY_HOTLIST-_-MAR_2010-_-HOTLIST0329&referral=00202

What is most fascinating about this post is that he tries to draw a connection in the form of a metaphor on the subprime loan business? Quite bizarre indeed if you think about it, the subprime loan scenario evolved from the perfect storm of:

·         Giving anyone a loan that could fog a mirror.

·         A spectacle of American greed where banks and investors were not and are not being held accountable even today, so much for Sarbanes Oxley.

·         Digitization of mortgage loan origination systems where loan processing leveraged business process management software to take loan processing time down from months to less than several days.

(There were business rules engines in the BPM systems that could easily kick out those with low credit scores, but somehow they were tweaked to let those less worthy in.)

I simply don’t get this metaphor, do you?

Trust Enters the Global Social Media Landscape

All right lets attack this hypothesis. The customer is king and has just been given a new pen that moves at Internet business velocity and the only thing slowing down the social customer’s influence (word of mouth marketing) are time zones. One of the issues that Mr. Haque argues is that social media sites lack trust, well that may be the case for some sites that are blurring the lines between our personal and professional lives, but they are not creating fake thin relationships in my world. In fact we decide to enter into them and they are bringing us closer to our friends, past friends and relatives that we still want to know more than any other platform. In the business world we know exactly how social media helps to bring us closer to our customers and how they are leveraging the platforms to drive change.

One of the key findings from our SNCR research last year was that professionals do trust information and relationships on social media sites. This is key for any business and for many companies it’s all about influence because trust is the foundation of influence on the social media planet influence flows like water, it’s everywhere. This is why I always say that social media is the new word of mouth marketing. In several of my previous posts I have demonstrated how P&G, Indium, Kodak, SAP and others are gaining competitive advantage through social media. Is your company leveraging social media to their greatest advantage?

Why the Internet is the Greatest Innovation of Our Time

When Proctor and Gamble decided to build a social network of more than six hundred thousand mothers, do you think they were worried about trust? Probably not, but what they did was build and leverage a social network to build their brand and get competitive advantage. This is a story best told by the most social customer of us all Paul Greenberg, the inventor of Social CRM. The Internet has not only connected us in ways that are innovative and great but from an anthropological standpoint it is melding the cultures of the world.

As a member of the WWW conferences I had the pleasure of working with many early Internet pioneers who would have never predicted the social media tsunami. At the time we were still babbling about how a protocol standard called TCP/IP had just created a global area network called the Internet and debating the nuisances of stateless vs. stateful protocol streams. Remember that this was just sixteen years ago. For those of us that have gray hair we remember how Microsoft fought the Internet and would not endorse this routable protocol even though theirs wasn’t routable. Wow times sure have changed, but guess what, now I am a social customer, author, participant and B2B marketer.

·         I don’t think my relationship with the hundreds of people that read my blogs each week is weak or fake.

·         I don’t think that sites like YouTube are a fad.

·         When I don’t like something in a business I go Yelp about it.

·         When I need information I do a search.

·         Before I buy a product I do a search.

·         My sales friends are using Facebook and LinkedIn to do “digital hard rock mining.”

·         When I need to find old friends and relatives I go to Facebook and most of them are there and I don’t think my relationships are weak.

·         When I join a professional group I go to LinkedIn.

·         When I watch baseball now it’s on the IPhone with MLB.com.

·         And today I did not join 304,059,724 against Obama's Healthcare takeover.

·         I would really like to know how the Havas Media lab positions itself as a platform for a new kind of strategic advisor that helps investors, entrepreneurs and firms experiment with, craft and drive radical management business models and strategic innovation.

 

Net/Net:

The Internet has rapidly expanded to become a global network of seamlessly connected computers and devices that has revolutionized information sharing and communications, challenged governments, broken down cultural barriers and driven innovation and business velocity to levels never before imagined. One of the most important successes of the Internet is how it is enabling globalization and more importantly business model innovation. Today’s most successful companies are driving product and business model innovation from outside their own walls by leveraging the Internet as a collaborative community building platform. This platform has allowed organizations to harness the innovation power of the community and not just individual innovation.

There are many that would argue that many of the enabling technologies that drive the Internet and Web 2.0 today have been around for some time. The reality is that we are finally leveraging their potential in new and exciting ways, there is more to come, because the Internet is all about innovation. 

Business Model Innovation: Blue Ocean Your Startup Thinking

When I think about what to post each week, foremost in my mind is how I can leverage my startup experience into actionable information that you can use in your business. Startups and small businesses as you all know operate at business velocities that are significantly higher than most companies. Most of the time you are too busy selling, providing services and/or producing product and you don’t have time to think, strategize and vision. I have learned that this can be an important time to stop, think, and look closely at where you are and what the road ahead could be like if you visioned it out and prepared for the growth ahead. It is also an important time to evaluate your long term business model and look for ways of optimizing business critical processes. As Socrates once said “the very thing that made you great will be your undoing,” and how many times have we heard CEOs say, “We made the biggest mistake when we were at the top of our game.” This week’s post is all about seeing the forest and the trees at the same time and creating an organizational culture of thinkers that think things through in pursuit of the Holy Grail, sustainable and profitable business model innovation.

 

One of my favorite business books is Blue Ocean Strategy, written by Professors W. Chan Kim and Renée Mauborgne of INSEAD, now one of the world’s leading business schools. Blue Ocean Strategy features a great Cirque Du Soleil case study of how to take the best of an old business model and mold it into a new successful one by using the attractive elements of the original model. Cirque as we all know has been wildly successful and has attained global appeal. Blue Ocean thinking can separate the “life style” startups from high growth companies with tremendous potential. I was lucky enough to work with the Cirque founders in the early days of their evolution and helped build some of their internal business processes and workflow engines, which at the time were way ahead of any potential competitors.

 

In my view, Blue Ocean thinking is a key element of any entrepreneurial visionary planning process. Getting out of your own Idaho so to speak, is often a great way to gain new perspective and generate ideas on where you currently are and your vision for the future. We accomplished this in several of my startups by having regular visioning discussions, and we also organized retreats away from the office with key officers and stakeholders in the company. It may sound like herding cats; however, if you bring in outsiders that can help facilitate the meetings and generally keep them on track; you will be much more successful than attempting to do it yourself. I would love to hear from you if you think differently about this strategy.

 

Visioning off sites are not uncommon in Silicon Valley and it is important to conduct them at seminal intervals in a startup company’s development. They are usually associated with revenue thresholds such as $5M, $20 or $100M. I can tell you from experience that off sites of any kind are not for everyone. And it is always in your best interest to carefully architect the offsite team’s chemistry to include just the right combination team members that are visionaries vs. those who are more execution oriented. I will again refer to Lynda Gratton’s excellent book, Hot Spots, as a reference guide to assembling the right team chemistry. Lynda’s research at the London Business School has focused on analyzing the team chemistry/organizational structure and how companies fail and/or are successful in reaching team objectives. Ms Gratton’s research was published in HBR early last year and reviewed more than 80 company’s team building efforts and results, www.hotspotsmovements.com.

 

Results from off sites can deliver amazing results in my experience and bond together executives and regular staff in ways that you never imagined. Make sure to clearly set objectives and if possible break out into sales, marketing and product oriented groups, with each bringing back their own vision of success. The focus is always on the bottom line, seeking sustainable profitable growth and applying what I call “joint value assessments” to business models and processes. Engaged and empowered executives and staff can bring out the best ideas for optimizing individual processes and models to meet the growth demands of the company. Always remember that the most valuable capital in your company is the human capital, and sales does not fix everything all the time, as some pundits say.

 

 The Personality of Fish: The Mole Crab 

At approximately twenty miles out to sea all scents of land and earth disappear and the smell of the ocean dominates. Last week we talked about the ocean being a river of rivers and we followed some of the rivers, visited with their inhabitants and experienced the unique personality of the Portuguese Man o War. One of the amazing things about going to sea for several weeks is the unique scent of the different water masses, and just like fish these water masses have their own personality, including destructive forces like warm core rings and the havoc they bring onto larval fish populations. This week we come closer to shore and enter the hostile world of the surf break zone and experience the life of Emerita, the Mole crab.

 

One of the most hostile places to live on our planet is within the surf or intertidal zone, where thousands of tons of water regularly crash onto sandy beaches, rocky outcroppings, breakwaters and barrier islands. Animals and plants that exist in this zone are some of the toughest on the planet and are regularly exposed to extremes of heat, cold, water and pressure. Mole crabs live in one of the safest places to exist in this environment, just below the surface of the sand and away from the pounding waves. I am sure you have watched birds running along the wave breaks probing the sand with their beaks in the wash zone of beaches; they are in search of mole crab colonies. Mole crabs are slightly bigger than the size of a human thumb and live along most beaches worldwide. In some parts of the world Mole crabs provide an important source of protein are harvested regularly.

 Mole crabs are one of the few inhabitants of sandy beaches and they continually borrow into the sand moving up and down the beach with the tide sifting plankton and detritus from the wave wash. Female mole crabs are much larger than males who become almost parasitic during mating season by clinging to the females for weeks at a time. During the spring and fall the female’s bellies swell with hundreds of red orange eggs and they are eagerly hunted by birds in pursuit of a protein snack. Most people who have been to the beach never realize that there are Mole crab colonies of thousands just below their feet. Often in business innovations and optimizations are so obvious and simple that you can’t see them.

Until next time great marketing and selling in the Millennium!

 

 

 

Startup Leadership in Turbulent Times: Company Values, Customers and Employee Morale Have Never Been More Important

Today, perpetual optimism is the force multiplier, now more than ever (Colin Powell, My American Journey). These are perhaps the most turbulent days of our lifetime, rampant uncertainty about the global economy, our jobs, our friends and families’ livelihoods, health care, education, global warming and to make things worse a weakening US dollar. These are the times that bring out the best and the worst in leaders. Leaders that have built their house on a rock of integrity, trust, and customer loyalty will weather the continuing storm. Those that rely on illusions, gimmicks and fear mongering and have already lost sight of their customers will sink deeply and quickly into the abyss. If you have ever witnessed a ship sinking the rats are the last to swim away from the vortex. This week’s reading is HBR’s, Drucker Centennial, What Would Peter Do? Is the title and as you all know, I am a huge Drucker fan.

Over the course of my career I often thought that participating in a startup was an adventure and it always reminded me of going on research cruises. Although several weeks at sea might seem short, activities and events at sea are accelerated at paces unimaginable, so it is actually a great metaphor. At the beginning of a cruise there is always uncertainty and doubt about the weather, the equipment, but most importantly the people. And unless you have personally handpicked all of your crew/employees, you have no idea how people will adapt and what leadership actions you will execute during your business voyage. There is really no difference in a startup or small business today, in some cases you need to act rapidly and effectively, in others time is your friend and using your best gut judgment is king. The really big difference is there is no day to day nausea of sea sickness to deal with in addition to lack of sleep, but that may not be the case for many employees today.

How Employees Think & Act in Turbulent Times

·         Employee thinking revolves around leadership:

o   Do I have confidence in the management’s decision making?

o   Do I trust the company and leader’s value system and integrity?

o   Are our leaders empathetic and understanding?

o   Is there fairness in decision making across the organization?

o   Can I trust the company’s business model?

o   Is my job safe?

 

These are all vitally important human issues today that seriously impact performance, productivity, innovation, attrition and your ability to conduct business. Dealing with them in an open, honest and fair environment will only deepen employee loyalty over the long run.

I have learned that there is no more powerful radical in the organizational equation than the negative power employee. They must be identified, controlled and/or expelled from organizational culture if necessary. This is the most important task of the sea going scientist manager, and the same goes for startup management. Negative power people will destroy the very basis of your management foundation and have the potential destroy your relationships with employees, customers and partners alike. On every ship I sailed on over a course of ten years there was always at least one negative power person.

 

·         Some employee actions in turbulent times revolve around:

o   Loyal employees persevering and maintaining focus and culture.

o   Lack of management trust results in a serious lack of morale.

o   The negative power people and managers wreak havoc by poisoning your relationships with employees, customers and partners.

o   New siloed political groups emerge across the company.

o   The best employees seek other opportunities, leaving behind a culture not favorable to the high performers.

o   Fear uncertainty and doubt creates apathy that drives down productivity and kills innovation.

·         How many of you have identified and dealt with the negative power people, I would like you to comment and share your management tactics.

 

Net/Net

 

One day I saw a bumper sticker that said, “There is no government like no government and then I thought to myself well if that is the case what about, ‘there is no management like no management.” There are many dysfunctional companies that creep and even some the cruise along with weak and unsupportive management cultures, in the end they almost always fail. One of the hallmarks of successful companies today is great management culture with a clear voice and vision of the future. Those are the companies that attract and keep the best because their managers are clearly focused on establishing and managing people to their highest abilities. Successful managers today need to be more sensitive to the human needs of employees, they are part therapist, mentor, teacher, but most of all they are fair and drive the best from the best. Being tough on employees that are challenged with work and family issues in these times doesn’t work, have more frequent one on one discussions with employees and most importantly preserve their trust. They will be there for you when the going gets tougher.

  The Personality of Fish: Killer Whales in the Sea of Cortez

 

 would have thought there would be Orcas in the Sea of Cortex well here is proof, this picture was taken two weeks ago about 50 miles off Puerto Penasco, in Sonora Mexico. The Marine Mammal Protection act of the 1970’s has been one of the only regulations that have had significant impact on the marine mammals in the US. In the Sea of Cortez marine mammals are alive and well, during the course of our eleven hours at sea we encountered more than fifty whales in addition to huge pods of dolphins and a small pod of killer whales. These animals are at the top of the oceanic ecosystem and appear to thriving in North America, this is extremely good news for our oceans.

Marine mammals, especially whales are like fishing boats that harvest nearly twenty four hours a day, they herd schools of fish and at times blow large clouds of bubbles underneath prey to concentrate them. They feed on plankton, bait fish and sometimes in the case of the Killer Whale they will separate a baby whale from the pod and feed upon it. Whales in general are some of the most unstudied creatures on earth and many of their habits and migratory patterns are unknown, especially their communications. I am sure that many of you who have encountered a whale remember the almost human look that a whale eye casts upon you when it looks up from the ocean. In these turbulent times, be understanding when your employees cast a worried eye in your direction, be a leader with compassion and great selling and marketing in Q4!

 

Making Marketing Accountable: And Beachcombing Tidal Drift Lines

How to make marketing accountable is an age old question that keeps rearing its ugly head in nearly every organization. And every time sales slide we hear the same old song: our marketing is not working, we don’t have enough leads, we aren’t sending the right message, our positioning is off, we are too expensive and the competition has better marketing “they are everywhere.” My dear old boss at Hummingbird, Jan Adamek would always say “marketing smarketing let’s just sell the stuff.” In many ways he was right and in many startups sales and marketing are connected at the hip, this is not the case in many large organizations where marketing often sits in the glass house.  Last week we discussed Indium’s three Cs of social media and how MVP executes best practices in integration social media marketing to drive lead generation and revenue for SAP. This week it’s the old and the new of marketing.

Age Old and New Marketing Questions:

·         Is marketing too important to be left up to the marketing people?

·         Can everything we do in marketing be measured?

·         If it can’t be measured then why should we do it?

·         How do we measure the impact of social media marketing?

Sales Driven Marketing People Rock

I firmly believe that marketing is too important to be left up to marketing people. So recruit and develop marketing people that have carried a bag. There is no substitute for front line selling experience, and if you find and/or convert sales people to become marketers they are, and/or will become your best marketers.  However, they are a rare breed, find them and your marketing department shines. For them marketing every day begins with sales and they think about it from the perspective of a sales person and what a sales person needs to sell.  They will automatically reach out to sales people and ask them what the current barriers to sales are? What ammunition (content, influence & qualified leads) can they put in a sales person’s hands that day and what kind of air cover they can provide for the sales marines in the field? Marketing and its various communications functions are in many ways the air force of business war, sales guys are the marines.

Measuring Marketing & Communications

Nearly everything you do in marketing and the various functions of communications efforts can now be measured. The first step is to take a close look at all marketing processes and look at how they are integrated to fill your funnel. Marketing in the sense of the four Ps used to be much harder before the Internet in my view, but those that have not adapted to the social media change will say it was much easier. The fact is that it is much more measureable now than ever.

Four Ps

Marketing your product to a place and positioning it with a price was the foundation of early marketing that has changed radically in the last ten years.

Think about how difficult it was to get competitive information fifteen years ago, it meant going to trade conferences, in some cases dumpster diving, and the best case scenario was always when the customer hated the competitor and told you all about them.

What is Measureable Today?

·         Traditional Marketing Vehicles:

o   Brochures and collateral created.

o   In person events and trade shows.

o   On premise customer visits.

o   Snail mailings.

o   Executive thought leadership.

o   Third party thought leadership.

o   Sales visits.

·         The Internet & Web 2.0:

o   Search word and engine effectiveness

o   Click through, from partners.

o   Unique visitor’s impressions.

o   Chat streams.

o   Downloads of content, ebooks etc.

o   Global distribution of visitors.

o   Webinar and virtual trade show attendees.

o   Brand experience and sentiment.

o   Number bloggers on your radar screen.

o   Blog tonality.

o   Social media sites that review your products and services.

o   Engagement: Facebook, Twitter, eg blog comments.

Communications in its various forms is the mouthpiece of marketing and the two organizations are connected at the hip in most successful companies. This is often the case in startup companies and SMEs where marketing- sales - senior management are completely integrated and this provides them with significant competitive advantage over larger competitors. And they simple can’t afford not to have effective marketing.

Measuring Brand & Thought Leadership

In the social media world it is becoming easier to measure reputation and brand experience by looking at the tonality of the blogosphere and social media peer groups involved with your products and services. Marketing is more than branding and brand management; however, these are two factors that were not easily measured just ten years ago. Brand is one aspect of marketing that is still very hard for small business to measure; however, social media can make it easier when employed. Thought leadership is also more measureable than ever within the collaborative influence chain that social media enables. Finding your thought leaders and evaluating the depth of their ecosystem and number of followers has never been easier.

As Darwin so aptly said, “it is not the strongest that survive, but those that can adapt to change.” The smartest marketers today are rapidly adapting to the social media tsunami and are leveraging it to competitive advantage.

 

Beachcombing Tidal Drift Zones

Every day our oceans fluctuate in a pattern of low tides and high tides in two sequences, with two lows and two highs every twenty four hours. When the moon and sun are in alignment with our earth we have our lowest and highest tides because of the gravitational pull exerted by these objects. Gravity pulls our oceans towards the equator and they bulge out creating extreme highs and lows in regions north of the equator. These are called spring tides and when they occur with storms we see the most damage and erosion on our coasts. During these times we have the highest and lowest tidal amplitudes and they can be very extreme, examples being the Sea of Cortez and Bay of Fundy where tidal amplitudes can exceed fifty feet. I have experience extreme tides in both of these areas and it is truly an amazing event.

As a young man I spent a great deal of my time working the tides and learned that on every beach there are two tide lines. At the top of the beach we always find what is called the high tide line and at the bottom of the beach or coast is the low tide line.  When beachcombing one should always walk both tide lines because they will have different animals and shell and of course my favorite beach glass. Beachcombing is one of my favorite past times and until next time I wish you great marketing and selling in the millennium. 

The B2B Social Media Olympics, Sponsored by Penn State’s ISBM & a Chance Meeting with George Bush Senior

Pennsylvania State University’s Institute for the Studies of Business Markets (ISBM http://isbm.smeal.psu.edu/ and part of the SMEAL College of Business) is another example of academic thought leaders who are working directly with industry to understand and capture competitive advantage in B2B marketing. Ralph Oliva, the Executive Director is what I call a “cosmic bondini” in that he connects the dots between what industry needs, and addresses those needs by building his network and foundation on rocks called research and B2P networking. Ralph, brother of my friend Vinnie Oliva at Gartner, assembled one of the first ever B2B conferences focused on social media. This ISBM conference was genius in the sense that it not only presented research that clearly shows where social media is going; but also provided speakers and practitioners that are actually doing it! HELLO!

Those practitioners included myself and Robin Carey of Social Media Today, Rick Short of Indium, Jeff Hayzlett of Kodak (see him on YouTube) and Cisco’s Doug Webster, in addition to several consulting organizations. One particular consultant/social media guru, had the audacity to actually get on stage and admit that they don’t even blog, wow are u kidding! This conference is one of the first I have ever seen that provides insights into how to execute a B2B social media strategy that addresses the bottom line, sales.

For background reading on thought leadership see Thought Leadership is Key to Marketing Communications Today at: http://www.thesocialcustomer.com/blog/PeterAuditore1/site/posts/

Net/Net: The Barrier to Executing B2B Social Media Strategy= Company & Org Culture

As Drucker always said “there is no strategy without execution,” and after spending last week with 100 marketing CMOs, directors and managers from more than fifty companies and organizations, I can tell you that most of them are far from executing any social media. Although many of the companies were from the manufacturing and the services industries they don’t get that B2B social media is simply another way of getting closer to their customers, partners and suppliers. Their company cultures are stuck in the mud of the antiquated four Ps of marketing, intellectual property protection discussions, and are threatened by the change of represented in the social media landscape that is downright scary to them.  This again harkens back to what I said multiple times last year about how social media can drive competitive advantage and most importantly sales. Get it!

I had the pleasure of keynoting this conference at the Houstonian hotel last week with my partner in crime Robin Carey. We presented SNCR research on how social media peer groups are rapidly becoming trusted decision support tools, and discussed the development of our famous MyVenturePad best practices in social media marketing case study. Here is a quick overview of the most important presentation that hit the spot.

Best Conference Presentation: Rick Short of Indium

Imagine if you were the marketing guru for a company that makes solder and solder paste how would you leverage social media?  Well Rick has been doing it for nearly five years now, Rick and I presented last year at the BMA conference and his formula for success with social media can be summed up in what he calls the three Cs and I love this:

• CONTENT        2          CONTACT        2          CASH

Rick’s story is indeed a best practice in B2B social media and he provided a roadmap to executing it. Rick has now convinced seventy of his company’s engineers to blog regularly on their areas of expertise and they are driving revenue from the people that read their blogs. He used one specific example of how an engineer was blogging on an obscure metallurgy topic and as a result the potential customer came to them because Indium has more content on the Internet about this area through blogging than any competitor, so they were viewed as an expert. In spite of the fact that Rick Short was there to tell them just how his company, Indium, makes money from social media, many conference attendees still did not get it, amazing.

A Chance Meeting with George Bush Senior

It is not often that I meet a President and have a conversation with one, but it was indeed fun to meet President Bush one of our kinder and gentler Presidents in Houston. While sitting out front of the hotel having my afternoon cigar, I noticed two secret service people open the door to the veranda I was sitting on, and out of a side door to my surprise emerged George Bush and his cane. For an older guy he looked great and vibrant and as I arose to shake his hand as he approached me and said “hi I am Peter from California, nice to meet you President Bush.” He looked at me and said, “You are enjoying a cigar” and I said “yes my grandfather told me that the man who smokes the big cigar has his life and plans well in hand.” (That is because usually when you light up a cigar everyone around you that does not smoke exitsJ)  George laughed and said “nice,” and then I said “we need to change this Cuban situation.” ‘George said why? George W likes cigars what should I tell him?’ I said “tell George W this, “Cuban cigars smoke up to twice as long as others, and they often taste like chocolate, nutmeg and other wonderful flavors and they are really smooth.” President Bush said, “I will, nice to meet you Peter.”

There is an awful lot more I could tell you about this conference but the net/net is most companies even today don’t understand the value of social media and don’t know how to use it, their competitors will. Until next time I wish you great marketing and selling in the millennium.