Winning by Sharing

Is social reading a reality?

NEW YORK, NY - SEPTEMBER 28: Amazon founder Jeff Bezos holds the new Amazon tablet called the Kindle Fire on September 28, 2011 in New York City. The Fire, which will be priced at $199, is an expanded version of the company’s Kindle e-reader that has 8GB of storage and WiFi. The Fire gives users access to streaming video, as well as e-books, apps and music, and has a Web browser. In addition to the Fire, Bezos introduced four new Kindles including a Kindle touch model. (Image credit: Getty Images via @daylife)

I've had my doubts about the whole idea of 'we read and comment on a book together' but Clay Shirky's recent article on how Kindle's annotation features are changing the way people think about this.  His questions; What is the future of reading? How can we make it more social?

Then I spotted this over at the Economist today:

Social Reading is switched off?  Haven't tried switching it on but maybe Clay Shirky has a point.

The social media revolution inside

Big thank you to Fran, Justin and Ben for inviting me to talk at the Social Media Leadership Forum to debate: How can senior executives best use social media to communicate with stakeholders?

Here's my take on the subject in 90 seconds!

 

Can't wait to see Don Tapscott (my hero!) talk on the same subject later this year at the Social Media Leadership Forum.

 

 

Super Connectors. The role of HR in the 21st century

Image by ixtlan via Flickr

To get an idea of what's inside this paper here are a few choice cuts.

Abstract.  This essay makes the case for the role of a Super Connector in large organisations whose sole responsibility is to create the same levels of connectivity, collaboration and productivity achieved by open source movements, conversational software and social media platforms.  It recognises the need for evolution rather than revolution and most importantly describes the end game, and the implications for leadership, employees, revenue, stakeholder investment return and market valuation.

 

The horrific events of September 11th and their aftermath, including war, restricted mobility, big government, and fear.  The banking crisis, crippled economies, the shift of power to the East, pandemic flu, climate change, peak oil, the war on terror, the emergence of social networks the size of continents, a black US president. When will things get back to normal? They are. This is the new normal.

Business and government aren’t structured or designed to cope with this rate of change and it’s apparent even to the layman they’ve struggled to understand, react and adapt to a seemingly endless stream of social, economic and political crises, many of which don’t even arise in their own countries.  

Productive professionals make big enterprises competitive, yet these employees increasingly find their work obstructed. Creating and exchanging tacit knowledge through interaction with their professional peers internally and externally is ‘what they do’. Yet most of them squander endless hours searching for the knowledge and access to people they need, even when it resides in their own companies.

The future of an organisation is a lot less about the nature of its issues, as it is about its capacity to invent social structures able to solve them.   That’s why social software is at its most transformative inside the organisation and the implications for its performance, sustainability, value and long term survival, are far reaching. 

Leaders get their support and power from the ‘bottom’ of the organisation where as chiefs and managers get theirs from the ‘top’.

 

Image by ixtlan via Flickr

The Super Connector is a network.  A network with ‘clue’ with the ability to build social software applications.  It’s not a single person, although it does have a leader, but it’s more about a group of people dedicated to delivering services that extract untold value from existing resources.  In effect, ‘doing better with less’.  But it needs the same level of investment as any other strategic shared service.  In return, the Super Connector can bring about profound measurable organisational benefits in revenue, productivity and the cost base.  So what’s the value proposition?

 

Read the whole thing by downloading the PDF.

 

 

 

Download The role of a super connector hr

Are you an Explorer or a Map Maker?

Image via Wikipedia

Shameless self-promotion.  LinkedIn hit the 100 million member mark in March 2011 and CEO Reid Hoffman sent a personal email to the first 100,000 joiners suggesting that this group laid the foundations for its exponential growth several tears later, the super connectors who heavily influence the success or failure of the network.  I was joiner number 5,471. 

Those early days in social media were a lot of fun but an interesting mathematician called G.H. Hardy once said: “When the map-makers arrive, you know the real explorers have already moved on”.

Are you an explorer or a map maker?

 

The new socialism

Great post from Patricia McDonald at BBH Labs on the impact of sharing.  She expertly describes ways in which sharing is transforming business models summed up by a quote from Wired Magazine's Kevin Kelly. 

“At every turn the power of sharing, co-operation, collaboration, open-ness, free pricing and transparency has proven to be more practical than we capitalists thought possible. Every time we try it, we find that the power of the new Socialism is bigger than we imagined” 

Patricia also points out how the trend for sharing information is spreading into physical goods and services.

 
 

Read the whole thing here.

 

 

 

 

 

 

How would you measure the ROI in social media?

By pure coincidence the subject of ROI and communities came up on Quora recently.

How would you measure the ROI in social media?

Here's my two pennies..

This is a question that has pretty much kept me up at night for over ten years. In that time I've come to the conclusion that it's the right question, asked the wrong way. The question we're all asking is actually; How do you measure the value of intangible assets?

Sit with CFOs and ask this question (instead of the ROI of social media) and you'll get a decent conversation out of them, because they've been looking for the (right) answer for centuries.

To drive this point home consider the value of a public company when it's being sold. A significant component of its value is based on what accountants call Good Will. For example (from Wikipedia), 'a software company may have net assets (consisting primarily of miscellaneous equipment, and assuming no debt) valued at $1 million, but the company's overall value (including brand, customers, intellectual capital) is valued at $10 million'.

The point here is that calculating Good Will is entirely arbitrary. Yes there are some accounting rules but the number agreed upon has no rigour to it in a mathematical sense and yet huge companies are acquired by other companies where the value of Good Will (or intangible assets) can be as high as 60%-70% of the purchase price. Remember Time Warner/AOL, PWC/IBM, Compaq/HP? The list is endless. Share prices also have a good will element.

Most studies show that over 60% of mergers and acquisitions don't return value to shareholders mostly because of the inaccurate calculation of good will. As an aside, the post mortem carried out by the US government following the Enron/Worldcom 'issue' and the dot com crash that brought about the Sarbanes-Oxley Act (that was supposed to prevent the latest 'credit crunch') fund managers around the world committed to allocating 1%-3% of their revenues on research into calculating the value of intangible assets. There has been some progress but I won't go into it here.

Ok, so enough theory. At a more practical level I use a handy guide as a starting point to construct a business case for investing in social media. There are both tangible and intangible benefits. Intangibles are recorded under a column of Brand Awareness, Reputation and Customer Loyalty. Tangibles are recorded under a column label of Direct Revenue & Lower Operational Expense. Rows are labelled;

Customer/Member profile
Advocacy/pass through revenue
Group Discounts
Affiliation
Member-Member commerce
Offline events (for talent acquisition, for example)
Competitive research
Product development & feedback
Peer-to-peer self-help
Membership

You can download it here;
I've found that most of the benefits are intangible (hence my diatribe above) but I'd be interested in how others would 'tick the boxes'.

My experience of working with senior managers and the boards of companies when justifying investment is that the most compelling benefits are in two main areas;

1. Demand Sensing. If a statistically significant number of customers say (or behave in a way) that tells me what existing product/service they want to buy and when they will buy it then I can plan/prepare. Think of how immensely effective this has been for Tesco's Club Card loyalty scheme, propelling it to the UK's number one grocer - and keeping it there. Three years ago a global brand approached me and said they were about to invest billions in a new product. They'd already done all their home work but as a quick additional check they wanted to ask a million people from a particular demographic if they would buy this product. They needed the results in 48 hours. They were prepared to pay up to $1 for every valid response. That's how important and valuable demand sensing is.

2. Product & Service Development. Companies understand the value of risk mitigation. If a million customers say they want a product or service then when it's brought to market, it kind of reduces the risk of getting it wrong. Unilever has been using online (closed) communities, under the radar for product development for at least 8 years and claim they've taken a third of their costs out of global R&D (Cluetrain: You want me to pay? I want you to pay attention!). That's a very, very big number. Witness the explosion of the use by Pharma companies of innocentive.com

The last project I worked on in social media was for Britain's eighth oldest company (founded in the 1600's) that no one has ever heard of. We ran a video competition. We devised it in a way that forced a high level of quality from participants. We got 53 submissions. Five of these were of sufficient quality to air on TV (as commercials) with no editing - they really were that good. The brand saved millions on commissioning commercials from traditional ad agencies. The business case was constructed on this premise from the outset.

In my humble opinion, the ground breaking research conducted by Yochai Benkler on the why Open Source (because that's what we're really talking about) is *a lot* more efficient than 'the firm' is easily the most insightful body of work to reference when building an ROI case for social media. His subsequent book called The Wealth of Networks is dry, academic and a struggle to get through but pretty much all the answers to this question are there.

An approach to creating a social media business case

Dancing with the customer. Image by ixtlan via Flickr

Whilst working at Carphone Warehouse and Best Buy I made a contribution to Forrester's excellent report on the ROI of Customer Services Using Online Communities.  One of the major obstacles that big companies still face is how to justify spending on social media in a language and format that financial planners and budget holders understand particularly in terms of benefits, which really means revenue and/or cost reduction.  This report includes some realistic figures that demonstrate how a strong financial argument can be made for using Twitter for some types of customer service.  In this case, the business case is based on reducing the cost to serve information to customers who would otherwise call the contact centre - typically the difference is $5 (call centre) versus (50 cents) Twitter for a successful transmission of information that enables the customer to self-service (for example configure email on a smartphone).   The spreadsheet accompanying the report uses these key paramaters to build the business benefits case;

Direct call deflection
Indirect call deflection

Basically if you can offload x% of traffic from the call centre how much is this worth in terms of fewer agents?

Other factors include...

Increase in agent productivity
Reduction in agent assisted email
Increase in relevant Web site content and search engine optmization (SEO) rankings
Customer retention and customer lifetime value

I use a handy spreadsheet as a starting point to guide people through calculating the business case. The biggest challenge is translating intangible benefits into revenue or cost reduction numbers.  Feel free to download and improve.

Download Sn biz benefits v2

 

The bank of Facebook

Image by ixtlan via Flickr

Thomas Power, Chairman of Ecademy, has produced this intriguing video predicting the evolution of Facebook into a bank.  His rationale is based on the idea that "the winner of the game is the one with all the names", which he's been saying since 2001. Ridiculous then, but a bit obvious now.

In the same way that Steven Spielberg can't get his films into movie theatres without the cooperation of distributors, however powerful and influential he is in the industry, Thomas argues that if you have a distribution channel the size of Facebook then you can pretty much dictate what goods and services get to these people.

Zemanta. A blogger's dream service

Image via CrunchBase

After attending the Next Web 2008 event, I've had another chance to use Zemanta.  It's essentially a blog writing assistant delivered as FireFox plugin.  It analyses the text of your post using proprietary natural language algorithms and then provides selections of images, links (articles, wiki references) and tags to use in your post. After two years of existence it's now seriously useful.

The algorithms attempt to accurately match these references to the text of the post, in a highly relevant way.  I met the principals in London in 2007 and again at the NextWeb conference.  The software works by parsing around thousands of blog feeds and news and information sources but hasn't quite got the breadth of content to support more specialist subjects. 

Related articles by Zemanta

• Zemanta and the Semantic Web (petervan.wordpress.com)
• Zemanta Gets an Update (415vince.com)

Engaging the customer using social media

Big thank you to my friend and colleague Anna Pollock for this insightful talk at Unicom's conference on Engaging the Customer: getting it right with social media.

Engaging the Customer with Social Media

View more OpenOffice presentations from Anna Pollock.

I particularly like slides 36-39.  What do these people have in common?  Just brilliant.