Book Review: Tales From a Veteran Blogger

I’ve been a reader of Ed Brill’s blog for several years, not because of any particular  interest in the IBM/Lotus products that he long championed, but because he’s just so good at blogging.

Opting In by Ed BrillBrill was a longtime product manager for IBM’s Social Business products, where he fought an uphill and often public battle against Microsoft. Brill’s barbs were notable because IBM’s buttoned-down culture had historically discouraged direct public engagement. How did a product manager get away with poking a stick in the eye of a major competitor?

The fact that he did get away with it is one of the sub themes of Opting In, Brill’s new book about social product management. “Only twice did someone ask for me to be fired at the chairman’s level,” he jokes. That seems funny today, but at the time it was a bold test of new management principles that challenged IBM’s 100-year-old prohibitions against individual expression.

Brill’s engaging and readable book is aimed at product managers, those corporate jacks of all trades who fret about everything from market research to customer support. Product managers are the ones who ultimately take the credit or blame for a product’s performance in the marketplace, and Brill sees social media as their ally at almost every level. Opting In covers everything from Google Alerts to Pinterest, and Brill not only outlines the unique utility of each of these tools but usually provide stories to support his points.

Telling Stories

For me, the benchmark of an enjoyable business book is storytelling, and Opting In has stories aplenty. They include detailed accounts of some of his more notable confrontations, such as a 2004 dustup with the influential Radicati Group and a 2010 challenge to a controversial Gartner report. Conventional wisdom holds that you don’t pick fights with these influencers, but Brill went to war and lived to tell about it. The explanations of his reasoning behind these actions are valuable competitive intelligence for any product manager.

Ed_Brill

Ed Brill

Most of the tales in Opting In are more upbeat. For example, Brill tells how a single tweet on a trip to Sydney led to a meeting with a local follower and fellow foodie and a friendship that has lasted for years. Social media is about more than business, he emphasizes. Those glimpses into your experiences, hobbies and interests create touch points that lead to meaningful relationships.

Product managers will learn much from scrutinizing Brill’s insight on topics common to the profession. He introduces the concept of “progressive disclosure” as an alternative to the traditional Big Bang product announcement, with the idea being to use social media to build awareness and buzz leading up to the communication of the news.

He describes how Lotus has increasingly moved toward open product development as a way to integrate user feedback into the process and even shares a story about how his group handled an unforeseen customer backlash to some changes that everyone expected to be a hit. Fellow product managers will relate to all of this.

Opening Up

The hero of the book is IBM’s Social Computing Guidelines, which get a full appendix entry of their own. Brill frequently praises these rules, which are often cited as a model of social media policy, for giving him the courage to take on some of his more notable battles and to continually give voice to his opinions.

The guidelines, which were first drafted in 2005, have changed IBM fundamentally. To dramatize the scope of that change, Brill recalls how he was slapped down by corporate communications in 2003 for identifying an employee in a blog post because, “we don’t have celebrities at IBM.” Less than a decade later, IBM was running ads celebrating individual employees.

“The guidelines…signaled to employees, clients and the market that IBM would stand behind its [people],” he writes. In a day when corporate loyalty seems almost a quaint historical curiosity, the kind of faith must be pretty empowering.

Full disclosure: I have a consulting relationship with an IBM subcontractor.

Enhanced by Zemanta

Social Marketing Wisdom From a True Practitioner

Stand Out Social Marketing starts a little slow, but if you stick with it you’ll be rewarded with truly actionable insight that can help your whole company become more social.

Stand Out Social Marketing coverThis new book comes from Mike Lewis, who is head of marketing at Awareness Networks, a personal friend and one of the nicest guys I know. Stand Out builds on the premise that a great online presence is a function of distinctive content delivered through multiple channels with the assumption that interactions with constituents are part of the process. The book’s initial focus on social listening tactics is somewhat incongruous in that context, but it gets rolling as Lewis moves along.

There have been plenty of books about social media marketing written by people (like me) who don’t do much of it. What makes Stand Out such a stand out is that Lewis not only brings years of field experience to the topic but also insight gleaned from hundreds of customer experiences.

This book is worth its cover price for chapter 4 alone. In it, Lewis sets out practical guidelines for getting the most out of social media interactions based upon real data from real campaigns. Lewis has the benefit of being able to tap into the knowledge that huge brands like Major League Baseball have gained from analyzing millions of customer reactions, and some of the insights are fascinating. For example:

–People post more content to social channels on Friday than any other day of the week, but Thursdays have significantly higher interaction rates.

–Nearly 100% of interactions around content posted to Facebook and Twitter occurs during the first 10 days, but only 34% of interactions around YouTube and WordPress content happens during that time. This means that content posted to these channels should be created differently depending on when people are most likely to discover it.

–Content published to three or more social channels generates about 30% more engagement than content posted to a single social channel.

This is what I call really actionable information. It will immediately change some of your tactics – and for the better.

In addition to  statistics like these, Lewis offers practical advice buttressed by concrete examples. For example, “Content should be focused on the needs of your prospects and customers – not on you, your company or your product.” While experienced social marketers may think this advice is obvious, it’s stunning how few marketers think this way.

Stand Out also has several excellent case studies from both B2C and B2B businesses that dramatize the advantages of engaging in conversation rather than spewing messages. An accompanying website provides bonus information that builds on many of the points raised in the book.

A metrics section near the end introduces some new measurement tactics that were unfamiliar to me but which provide a solid foundation for understanding reach and effectiveness. It goes well beyond fans or followers to include factors like SEO effectiveness, interactions, activity and even customer service. These are useful ideas to internalize in making a comprehensive ROI evaluation.

It’s hard to think of a social media marketing angle that hasn’t already been covered by some other text. Mike Lewis manages to find one.

Enhanced by Zemanta

Finding Balance in the Always-On World

Digital LeaderI picked up Erik Qualman’s Digital Leader expecting a very different experience from the one I got. Qualman is a thought leader on the transformative potential of social media whose 2010 bestseller, Socialnomics, is considered a textbook in its field. I expected Digital Leader would instruct me on how to further immerse myself in these tools of change.

But quite the opposite is true. While Digital Leader is unabashedly enthusiastic about technology, it is more about about restoring balance to your life, getting your priorities straight, learning to relax and even disconnecting from the grid on occasion. I’ve already made three or four changes to my daily routine as a result of insights I gained from this book, and that’s good enough to merit an enthusiastic endorsement.

Eric QualmanQualman (left) lays out his thesis in the book’s very first words: “Life is complex; those that simplify it win.” What follows is an engagingly uplifting read that focuses on making the most of your productive time so that you can maximize the value of your downtime.

The phenomenon Digital Leader addresses is familiar to many of us. Our world increasingly demands that we be constantly connected and always available. Our greatest challenge is no longer how to connect with others but to keep our digital lifelines from entangling us.

Qualman cites numerous examples of people who have found this balance. They range from Monster.com founder Jeff Taylor, who refuses to check e-mail after he leaves the office every day, to football star Rosie Grier, who found relief from a pressurized career in needlepoint. Chapter 5, entitled “Simple = Success,” has many practical examples of how we can simplify daily tasks, and I’ve already put some of them into practice. For example:

Don’t be a prisoner to your inbox. The fact that someone sends you an unsolicited e-mail does not mean you are obliged to respond. Most e-mail messages that demand a reply can be dispatched with a delete key or a one-sentence response. Someone else’s needs are not necessarily your problem. This advice is already saving me time.

Focus on completing the tasks that matter. Multitasking actually makes us less productive. Set out two goals to accomplish each day and make them your first priority. Everything else can wait.

Follow your passion. Qualman is particularly taken with the examples of legendary innovators like Thomas Edison and Henry Ford, who refused to accept the conventional wisdom that what they were doing was futile and who treated failure as a necessary step on the path to success. Innovators have big dreams.

Unplug occasionally. Qualman recommends completely shutting off e-mail, Twitter and the like once a week. I’m not there yet, but it’s a laudable goal.

Rest. Sleep deprivation and 17-hour workdays ultimately impair judgment and lead to bad decisions. Let your body, not your alarm clock, determine how much sleep you need. I heeded that advice and got an extra hour of sleep just this morning.

Failure is a persistent theme in Digital Leader, but always in a positive sense. “I failed my way to success,” says Edison in a quotation leading a chapter that highlights the virtues of what Qualman calls “failing forward.” Veterans of the tech world will recognize this willingness to learn from one’s mistakes as a core ingredient in the success of Silicon Valley. Other parts of the world have tried to attract technology entrepreneurs with tax breaks and subsidies, but none has duplicated this essential trait.

Don’t interpret these examples to mean that Digital Leader is some kind of self-help tutorial. Substantial sections of the book are devoted to the stories of successful leaders, although not all of them are digital. The overarching message of this book, however, is that balance, passion and a willingness not to take oneself too seriously are qualities that many leaders share. Digital tools are a means to an end, but they shouldn’t be a lifestyle.

‘The Truth About Leads’ Is Just That

I spent 15 months as a sales manager, which was just long enough to learn how little aptitude I had for the job.

The experience did give me an appreciation for the difficulty of selling, though. In 20 years as an editor I had developed an attitude that’s common for people who produce products: I believed that most salespeople were overpaid, under-worked and basically lazy. My 15 months of hell taught me otherwise, and that’s why I was curious when Dan McDade sent me a copy of The Truth about Leads.

Truth About Leads Soft CoverMcDade Is an entrepreneur whose company, PointClear, helps businesses improve their prospecting and lead nurturing. The Truth about Leads is a short book – only 101 pages – but it’s packed with sales wisdom. Some of McDade’s advice will be difficult for sales managers to hear, but it’s hard to argue with his logic.

McDade believes that most companies invest far too much in lead generation and far too little in lead qualification and nurturing. Salespeople are too quick to discard leads that don’t show immediate potential, preferring to focus on the small number of opportunities they can close quickly. In doing so, they squander opportunities to pursue long-term relationships that can yield far more revenue over time.

This behavior contributes to the chasm that exists between marketers and sales people in many organizations, particularly B2B companies. Marketers throw large numbers of leads over the wall to sales because that’s what they’re paid to do. Sales people don’t effectively follow up on longer-term opportunities. Each party complains about the other’s incompetence.

McDade (left) lays equal blame on both parties, concluding that the net effect is “about 95% of generated leads are not effectively pursued by sales.” Lead nurturing takes time and persistence that few sales people have and fewer sales managers tolerate. The reality is that it may take 10 to 12 calls and e-mails to get the attention of a single prospect. Most sales people give up after three. And even that is only the beginning. Ten percent of qualified leads close within three months, but 45% will close within a year if they are properly nurtured. The good news is that the leads that take the longest to close are the most likely to be good sources of repeat business. Once they’re convinced, they’re all in.

McDade is particularly critical of the cost-per-lead (CPL) metric that is commonly used to measure marketing effectiveness. CPL drives marketers to outsource demand generation to unskilled contract telemarketers or to purchase lists of dubious quality. These tactics can generate a lot of names, but not many qualified leads. “Fewer than 7% of leads passed to sales by marketing should be,” McDade states.

In his view, lead qualification is a far more productive investment than lead generation because it focuses sales resources on the opportunities that have the highest conversion potential and the greatest long-term value. Lead qualification also demands cooperation between marketing and sales, which is something most companies badly need. Marketers should be rewarded for making sales successful, not throwing names over a wall.

The Truth about Leads has numerous other tactical gems that salespeople will appreciate. The section on selling to pain rather than opportunity is right on the mark as is the persuasive case McDade makes against “appointment setting,” a practice that focuses sales resources on meeting with people who have a lot of time on their hands.

The Truth about Leads does what a good business book should: Defies conventional wisdom with logic born of experience. Reading it is two hours well spent.

Sensible Talk About Social Media Measurement

Measure What Matters by Katie PaineThe Internet is the most measurable medium ever invented, but the perception that returns on online social interactions can’t be quantified stubbornly persists. Those who still harbor this misconception should do themselves a favor and pick up Measure What Matters, a guide to digital ROI that puts common sense ahead of the current fan/follower frenzy.

I’ll admit my biases up front. I’ve known author Katie Paine since her days as a PR pro in the 1980s and am an unabashed fan. For the past five years I have worked with her closely as a member of the Society for New Communications Research, which awarded her its “Fellow of the Year” distinction in November. I am also quoted on the back cover of the book, although I did not get a chance to read the full volume until recently.

Like many former publicists, Paine has smoothly migrated her relationship-building skills into the social world, but unlike most of her peers she has chosen to specialize in numbers. That’s a good thing for the rest of us because social media marketing, like PR, has always been challenged by the lack of reliable success metrics.

Katie PainePaine (left) believes that anything is measurable if you know where to look, and in this book she offers plenty of ideas. Measure What Matters isn’t about social media as much as it is about the importance of relationships and the need to understand how they equate to success. This is an important point because many of the tools Paine recommends work well in any medium.

In fact, one of her favorite measurement tools – the Grunig Relationship Survey - was invented in the days before blogs and Twitter, but is every bit as useful today as it was a decade ago. Even conventional research tools like mail surveys and focus groups still have their place, Paine argues, despite the fact that many people consider them to be passé. The point isn’t for organizations to argue about tools but to figure out the best ways to measure success. If that means counting mentions of a brand in newspaper headlines, so be it.

Volume 2

Measure What Matters is essentially a revised and expanded version of Measuring Public Relationships, a self-published 2007 title that I reviewed here. This time Paine has a major publisher at her back and the benefit of many new tools to tackle, including Twitter and Facebook. When you scan the table of contents, however, you’ll see nary a mention of those social networks. Instead, the author focuses on identifying constituents, defining messages, selecting tools and reviewing and tracking results. The role of communicators in a democratized media world really hasn’t changed all that much. They still seek to communicate a message or favorable impression. While there are a whole lot more tools they can use to do that today, the noise level is also a whole lot higher.

The book is chock-full of gems, ranging from useful asides like the fact that 40% is a good response rate for an employee paper survey, to the exhaustive list of 27 different types of conversations in chapter 4. The “five phases of engagement” in chapter 5  walks readers through the process of understanding how relationships proceed from initial impression to purchase advocacy. That chapter also features an eight-step process for analyzing social media content that keys in on core issues like understanding how the message was received, how it was interpreted and who did the interpreting. PR veterans will recognize many of the same concepts here that they have been using for years. In some respects, the world hasn’t really changed all that much.

Chapter 11, which looks at crisis communications, imparts basic wisdom that I hadn’t even considered. For example, the definition of “surviving a crisis” is situational. Long after the initial damage has been swept away, the reputational fallout of a crisis may make the company vulnerable to a takeover or limit its ability to attract quality talent. Paine also astutely points out that good relationships with customers, analysts and other influencers may prevent a crisis from occurring in the first place, an outcome that is almost impossible to measure.

The final two chapters look at measurement tactics for nonprofits and educational institutions, two clients with which Paine has extensive experience.

Paine’s practical and time-tested advice is a welcome relief to a Klout-obsessed world that seems more taken with fans and followers than with business results. I highly recommend it.

 

Awareness E-Book Raises the Bar on Social Measurement

The question of how to measure social media performance, particularly in a marketing context, continues to be one of the industry’s hottest topics. Although many people are aware that traditional metrics like page views, visitors, followers and likes are poor indicators of success, the vast majority of marketers I speak to still focus on these overly simplistic criteria. These numbers may be of little value, but at least they’re understandable.

The more sophisticated practitioners are turning toward metrics that indicate engagement. Examples include comments, retweets, shares and subscriptions. Now Awareness Networks has contributed some important new thinking to this topic with a free e-book entitled “The Social Marketing Funnel: Driving Business Value with Social Marketing.” (Full disclosure: I am quoted in the book but did not contribute meaningfully to the methodology and received no compensation.)

Awareness outlines five priorities that companies should define in becoming a best-in-class social marketer:

  • Measure and Grow Social Reach
  • Monitor Social Conversations
  • Manage Social Content
  • Practice SEO
  • Measure and Analyze Social Activity

Not surprisingly, the company has tools that help in many of these areas, but that’s one reason its research is so useful: The recommendations are based upon the experiences of more than 100 customers.

The most successful of those are reporting direct correlations between social media marketing and sales, and they have certain practices in common. Most use at least three major social media channels, compared to less than two for the average company. They also have multiple presences within each channel, such as product-specific pages on Facebook. And they measure like crazy.

Nearly 80% of the companies Awareness surveyed use social media channels to identify and respond to customer service issues and two-thirds use them for prospecting. Remarkably, only 18% said they have “formal tracking process in place to manage processes and better understand success criteria.” In other words, a lot of social media is still being done with seat-of-the-pants justification.

That’s going to change as more sophisticated metrics emerge, however, and here’s where this report has particular value. It describes four measures of content effectiveness that take into account multi-channel activity: Content-to-Contact Ratio, Comments-to-Content Ratio, Comments-to-Profile Ratio and Content-to-Share Ratio. I won’t describe these metrics in detail – you can find that in the e-book – but each speaks directly to the value of engagement.

As businesses spread their wings across increasing numbers of social communities, they need to get a better handle on what’s working and what isn’t. The cost of maintaining an effective presence is only going to go up as the market gets crowded, and it won’t be acceptable for only one in five companies to have meaningful measurements in place.

As I have noted elsewhere, our current obsession with counting fans and followers is an artifact of old media thinking. Online marketing provides much richer options for understanding how people interact with our content. Awareness’ e-book is an important attempt to try to nudge marketers toward realizing the potential of the information they gather.

Awareness Social Funnel

 

We Like Readers Like This

Bernie Goldbach posted a nice comment in the For Immediate Release FriendFeed room about Social Marketing to the Business Customer.

“I like Social Marketing (Gillin & Schwartzman) so much that I bought a copy for every day of the week,” he wrote, along with the picture below.

Music to our ears, Bernie! Although we know from your comment on FIR #592 that you really bought six copies because you’re using the book in your class. That’s good, too.

Social Marketing to the Business Customer books

“Content Rules” Is an Essential Desktop Reference for Social Marketers

Content Rules bookMy mother used to justify her massive collection of cookbooks by saying that a volume was worth buying if there was just one outstanding recipe in it. By that metric, pages 157-168 of Content Rules are worth the cover price alone. I thought I was pretty savvy about creating content, but authors C.C. Chapman and Ann Handley gave me at least a couple of dozen new ideas. This is a practical and useful book that every marketer who’s struggling with the new world of democratized publishing will find of value.

Chapman and Handley start out with a list of terms that they would like to see banished from the marketing vocabulary, including “leverage,” “proactive,” ”solution,” “drill-down” and “drink the Kool-Aid.” They have good reasons for hating these buzzwords, and I winced to realize that several regularly turn up in my own writing. The authors practice what they preach, though. This book is written in clear, declarative and hype-free language. It bubbles with enthusiasm for the topic and its recommendations are the kind you can take to the bank (there goes another buzzword).

Chapman and Handley are clearly fans of great writing, and it shows in their use of simple language and playful asides that inject a human touch when the text strays into the realm of the academic. They even invented a few new words, such as “re-imagine” as an alternative to the more mechanical “re-purpose.” Early on, they pay homage to Strunk & White’s Elements of Style, prompting me to haul out that 105-page masterpiece and re-acquaint myself with the beauty of simple language.

Pages 157-168 lay out 25 rules for successful webinars. As a veteran of more online events than I can count, I found at least 10 great ideas here. For example, how about taking audience questions during the webinar rather than at the end? Or promoting the event with a short podcast? Follow up  with an e-mail inviting follow-up questions. Post the whole thing on SlideShare. Why didn’t I think of those?

Content Rules doesn’t pretend to be a visionary treatise on the future of social media. There are plenty of books out there that do that. This is a hands-on guide that’s meant to be marked up, so bring a  highlighter. The book includes practical tools like the worksheet that Kodak uses to stimulate ideas from prospective bloggers and tips on where to find free art to dress up blog posts. It will even help you decide when to use in-house content experts and when to contract for those services (though some payment guidelines would have been helpful there).

The authors tracked down many new case studies to provide a welcome break from the Zappos and Blendtec examples cited so frequently elsewhere. For example, there’s Sears Yard Guru, which helps potential buyers of lawnmowers choose equipment, and Army Strong Stories, which tells of military life in the words of soldiers in the field. There’s even a chapter devoted to B2B marketing, an often overlooked category that the authors assert can be just as innovative as the consumer marketing sector.

There’s even advice on how to write headlines that are catchy but not cliché. For example, compare “Insights from Social Media Research” to  “The Naked Truth: What’s Hype, What’s Not in Social Media.” Both can describe the same content, but which do you think is more likely to grab attention?

Throughout the book, Chapman and Handley encourage marketers to think big and take chances. Attracting attention on the crowded social Web isn’t about playing it safe, they say, so get comfortable with risk. “I’d worry less about shocking customers than I would about boring them,” says Jellyvision founder Harry Gottlieb in one notable quote.

Content Rules isn’t a book for corporate strategists or CEOs. It won’t give you great insight about what’s coming down the social media road. But it doesn’t pretend to do these things. This is a disarmingly informal, friendly and approachable book that you will want to keep on your desk and consult when the creative muse has fled you, as it does all of us at times. As a recipe for content, it would have made my mother proud.

Tribes Rule the Hyper-Social Organization

Hyper-Social Organization CoverI’ve been looking forward to reading The Hyper-Social Organization since I first heard François Gossieaux and Ed Moran discuss the findings of their “Tribalization of Business” research at a conference two years ago. I wasn’t disappointed. In this groundbreaking book, the authors expand upon ideas laid down in their early research that are both simple to grasp and momentous in their implications.

The assumption in The Hyper Social Organization is that human beings are basically social animals and that our behavior is fundamentally tribal. Given the opportunity, we seek help from others when making important decisions and willingly assist other members of our tribe. The popularity of social networks and collaborative projects like Wikipedia attests to these instincts.

In a business context, however, tribes have barely been a factor. Our ability to tap into networks of like-minded people has been limited by space and time. The whole relationship between institutions and their constituents is hard-wired around the assumption that people on the consuming end of the transaction are mostly in the dark. This is been a huge advantage to suppliers. Basically, he who shouted the loudest had the edge. That isn’t true any more, though.

Rules Have Changed

In the last five years, the supplier-customer relationship has begun to change fundamentally because of the Internet. Customers today can easily find each other for advice, and that’s exactly what they’re doing. The resulting changes in market dynamics, the authors argue persuasively, will disrupt business at every level. The Hyper-Social Organization is a look ahead at how those disruptions may play out.

Some markets have already seen this shift occur. A friend of mine who manages an auto dealership tells me that many customers today come into the showroom better informed about the vehicle they want to buy than his own salespeople are. As the Internet has created smarter car buyers, auto dealers have had to overhaul their businesses. Most make little margin on new vehicle sales anymore and must take most of their profit from service.

The same dynamic will play out across many more industries, the authors suggest. In markets in which peer information is easily obtained, the vendor becomes nothing more than one more voice in the crowd, and probably not a very important one at that. As companies cede control of the megaphone, they will have to re-examine their entire value proposition and change many of the ways they work.

For example, marketers will no longer be able to push empty messages because they will simply be ignored. The only hope for marketing is to become a valued source of advice. That doesn’t mean publishing more promotional white papers. It means listening to the market and helping customers make wiser decisions, even if that means recommending someone else’s product.

Similarly, sales must evolve into more of a consultation and systems integration role. Ultimately, the authors suggest, sales representatives must be encouraged and actually rewarded for suggesting lower-cost or even competitive products if that advice is in the best interests of the customer. Behavior that is anything less than helpful will be ignored or, even worse, punished in a public forum.

Marketing and sales organizations will both need to adapt to the end of the traditional funnel. Customers will no longer enter the company’s orbit at the early awareness stage; they may not make their first contact until they’re ready to buy. This means marketing materials must be overhauled to address customers who enter the funnel fully informed with information from other sources.

There are implications for the workforce as well. Gossieaux and Moran assert that successful companies will be those that empower their employees to make decisions on behalf of the customer regardless of their formal role in the organization. Among the many examples they cite is JetBlue, which shuns a rule book in favor of five core values — safety, caring, integrity, fun and passion — that each employee is expected to live by. Employees are never punished for making decisions as long as they adhere to those core principles.

Adopting an External Focus

Embracing an outwardly focused, socially active organization will require tolerance for a certain amount of “messiness.” This is inevitable and even desirable as organizations learn to quickly test, assess, fix and discard ideas based upon customer feedback. The good news is that customers can be remarkably tolerant of mistakes as long as businesses seek their input and are transparent and earnest about their motives.

In the end, the rise of social media “is likely to present companies with a critical question that is bound to keep executives busy for the next few years: What business are we in?” These kinds of life-or-death choices will be propelled by the ease with which operations can now be outsourced half a world away. Any line of business that does not provide the opportunity for clear competitive differentiation should be discarded, the authors say. Many companies will find that their only source of sustainable advantage is in customer service, systems integration and innovation. Businesses must effectively become integrators because otherwise their customers will do the integration themselves.

If this sounds like a lot of bad news, it is, but there’s also a silver lining in The Hyper Social Organization. Gossieaux and Moran believe that organizations that embrace the concept of hyper-sociality and involve external constituents at every level can reap enormous benefits. Crowdsourced product development is far cheaper than hiring legions of engineers. Customers who arrive via word-of-mouth recommendation are twice as loyal as those who respond to an ad. In fact, external constituents can take on much of the work that paid employees now do if they are courted appropriately.

Not that this is going to be easy. Twenty years ago, a lot of big computer companies made their money selling hardware. As market forces turned  that business into a commodity, they were forced to shed often very large businesses in order to remain viable. It was an agonizing process, but the companies that survived it are more diversified and better prepared for the future. Many didn’t survive, though, and if the scenario that Gossieaux and Moran portray comes to pass, a lot of other organizations are in for the same experience.

New Media Demands New Leadership

I don’t go to the South by Southwest conference for the sessions as much as for the people. The most interesting conversations usually happen outside of the conference rooms. One discussion that stuck with me this week occurred after a presentation by MIT’s Andrew McAfee entitled “What Does Corporate America Think of 2.0?”

While I was waiting in line to introduce myself to Mr. McAfee, I eavesdropped on a conversation he was having with the young woman in front of me. She gave her age as 28 and said she had recently been hired to coordinate social media at a real estate company where her bosses were mostly in their 50s. She was clearly demoralized and frustrated.

The young woman had been brought on board to get the realty company up to speed in the new Web technologies. She understood that conversational marketing requires a culture change, but her management wasn’t interested. Her bosses, she explained, saw social technology as simply another way to distribute the same information.

For example, she had been ordered to post press releases as blog entries and to use Twitter strictly for promotional messages. She had been told to get the company on Facebook but not to interact with anyone on its fan page.Her communications with the outside world were to be limited to platitudes approved by management.

I felt bad for this young lady and also for her bosses, who will no doubt lose her in short order. I suspect they hired a social media director in the belief that she could create new channels for them, but they didn’t understand the behavioral change that was required on their part.

Open Leadership

A couple of nights earlier, I attended a dinner given by Altimeter Group, whose founder, Charlene Li, co-authored the ground-breaking book Groundswell. Charlene was handing out galley copies of her forthcoming book called Open Leadership. In it, she suggests that management strategies must fundamentally change in the age of democratized information. I’ve only read a third of the book so far, but I can already tell that it will cause considerable discomfort in corporate board rooms.

In the opening chapter, Charlene notes that “to be open, you need to let go of the need to be in control… you need to develop the confidence… that when you let go of control, the people to whom you pass the power will act responsibly.” This notion of leadership replacing management will shake many of our institutions to the core.

The traditional role of management has been to control and communicate: Managers pass orders down from above to the rank-and-file who are expected to do what they are told.

In the future, communication will increasingly be enabled by technology. Employees will be empowered with information and given guidelines and authority to do the right thing. Middle managers won’t be needed nearly as much as they are today. Organizations will become flatter, more nimble and more responsive because information won’t have to pass up and down a chain of command before being acted upon. This will result in huge productivity gains, but progress will only be achieved when top executives learn to let go of the need to control and to accept the uncertainties of empowered constituents.

No Pain, No Gain

The real estate company’s mistake was in believing that it could participate in a new culture without changing its behavior. It saw social media as a no-lose proposition; distribute the same material through new channels but don’t accommodate the reality that constituents can now talk back. Any company that takes this approach will fail to realize the benefits of the media. Once its customers realize that their opinions don’t count, they will stop engaging with the company. That doesn’t mean they won’t do business with the company any more, but the benefits of using the new media will be lost.

I have never advocated that all companies adopt social media. Each business has a different culture, and some adapt more readily to open leadership than others. If employee empowerment and institutional humility don’t fit with your style, then social media is probably not for you. You may do just fine for several years without changing your practices. But if you choose to play in the freewheeling markets enabled by customer conversations, then you’d better be willing to let go of control.

Over time, I believe all companies will have to give up the belief that they can control their markets, because interconnected customers are an unstoppable force. In the short-term, however, businesses need to do what feels right for them. If you work for a company that can’t adapt itself to the concept of open leadership, then start circulating your resume. These days, there are plenty of businesses that are eager to change.