To me this looks very much like the early days of the Web. Everybody figured they had to be out there but they didn’t know what it meant. We’re going through a lot of the same machinations. In the early days of the Web you saw consumer packaged goods firms throwing up Web sites without a lot of idea what they were trying to accomplish. The same is happening with the social space, but it’s happening so fast.

The speed of social media today is stunning. I think the biggest mistakes we’re making are around the consistency of the message, the brand quality and the way we have traditionally done things, which is a one-way dialog. By definition, social media is a two-way dialog between your customers and your employees. I have seen more mistakes with people jumping into the social media space without understanding this simple precept. This is a two-way dialog and someone needs to be handling that conversation.

Also, if you’re going to ask for opinions, be prepared for what you get. You need to be able to react to requests and to complaints. You turn this thing on and you get hundreds or thousands of dialogs coming in. How effective is the organization at responding to that? Do you have the tools to effectively engage in this dialog?

Social media is not a technical expertise. It’s a cultural expertise. Right now the pendulum is swinging more and more toward social media as the tool to communicate. It is a tool, but companies should not lose that direct contact with customers. There’s a risk of losing face-to-face engagement with customers and employees.

The other thing I worry about is the explosion in data collection. All this dialog has created a mountain of data and we have to figure out how to apply social analytics and who’s got the toolsets that can help us. How do we collect all this data and apply tools in a space that’’s moving so fast that people expect immediate responses. How do we do that while protecting the integrity of the brand?

Most of us do not have the skills to collect and understand the data we’re collecting. They’re spending a lot of money on this and there’s a lack of understanding about the value we’re getting.

The other issue I worry about is security. Social media doesn’t introduce new risk in itself, but it does present the opportunity to identify risks earlier. However, it also creates the opportunity to detect problems within the organization. If I can listen in on my associates’ dialogs, I can analyze it and identify potential risks in the organization before it’s apparent. I can identify individuals who may present a threat to the organization. Now there’s a big leap between doing that and taking action without evidence, and I’m not advocating a Big Brother approach, but I think a big part of the social future will be companies’ ability to listen in and understand what employees are talking about.

Organizations that are going to optimize social are going to need to make organizational changes, put tools in the hands of their employees and then get out of the way. But that’s not really a big leap. The fallacy of our current situation is that you think you have control and you don’t.

As the CIO I don’t want to own this space but I want to enable it. This is a fabulous opportunity to take your relationship with the CMO to the next level.

This is one in a series of posts sponsored by IBM Midsize Business that explore people and technologies that enable midsize companies to innovate. In some cases, the topics are requested by IBM; however, the words and opinions are entirely my own.

I created the presentation below largely for my talk tomorrow and wanted to share it. In particular, look at slide 3, which shows the results of a recent Economist Intelligence Unit Survey of 329 Business Leaders. The survey asked which group within the company had primary responsibility for social business. Not surprisingly, marketing topped the list. Surprising is that IT isn’t even on it.

Study after study has documented that companies are doing a poor job of measuring the results of their social media marketing efforts and have made only weak attempts to integrate customer service data and so-called “social CRM” to create a holistic view of their customers. IT leaders are experts at measurement, and they also have cross-functional visibility that makes them the most logical candidates to integrate islands of automation. This is an opportunity for them to pick up the ball.

I suggest in my presentation that there are several initiatives IT could lead that would give them a critical role in social business. They include standardizing and improving measurement criteria and give businesses a more complete view of their markets. Feel free to download the presentation; it’s posted on a Creative Commons Attribution License.

And please let me know what you think.

So when IBM began to introduce the concept of “social selling,” it chose a test base of a few hundred salespeople and their managers to build a set of integrated systems that improved productivity and reduced administrative overhead. In a presentation to the SugarCRM SugarCon conference in San Francisco earlier this week, Gary Burnette, vice president of sales transformation at IBM, told how the implementation team at IBM succeeded in making social selling a coveted goal rather than another set of rules and reports.

“We didn’t think of it as social selling; we thought of it as improving sales productivity,” Burnette said of the pilot. “It was about returning value and time to our sales teams for their time invested.”

Familiarity Breeds Intent

The program began with the assumption that nearly every salesperson was already familiar with the value provided by Facebook and LinkedIn in their personal lives. The tools made it easy to find information and expertise by consulting friends. Those same capabilities could be useful as a formal part of the business process.

Download Gary Burnette’s Social Selling Presentation here

A key goal was to simplify reporting, an already distasteful task that becomes more intrusive as the end of the quarter nears. Management has a constant need for information about the status of different sales opportunities, and as a result “We’ve had sales people called out of client meetings to answer questions from upline sales execs,” Burnette said. Much of this information was locked up in Excel spreadsheets owned by individual reps. The only person who could answer a question was the representative on the account.

IBM built a sales force automation system based on SugarCRM, Websphere and Lotus Connections to enable collaboration and streamline visibility into the sales cycle. Cognos and SPSS analytics were applied to better qualify opportunities and improve forecasting. As a result, salespeople now know more about their prospects and managers have better visibility into progress against goals.

Opportunity reports were replaced with an “activity stream” approach similar to the Facebook timeline that enables salespeople to document the status of each opportunity on an ongoing basis. Management can peek into the status of opportunities at any point in the process and get the latest information. As a result, lag times have been cut from five days to almost nothing and report preparation has been significantly reduced because everyone has access to the same information.

“I don’t think most senior sales executives have any idea how many people are behind the scenes creating reports and forecasts,” Burnette said. “If managers are in collaboration with their teams the information is more accurate and less filtered.”

All members of the team can now apply social tools like tagging and profiling to identify and recommend experts who can help solve customer problems and closed deals. “The management team is helping the seller sell instead of asking why they aren’t selling,” Burnette said.

Critical Success Factors

A project this ambitious can’t succeed without support at three levels:  top management, brand managers and the reps on the street. The fact that new IBM CEO Ginni Rometty had endorsed the project before she even became CEO was a godsend, Burnette said. Also critical was involving users in the development of the dashboard. Nearly 800 sales reps gave feedback at every step. Brand leaders helped in strategic direction so that the most important information would be the easiest to find.

Social selling is now being woven into the mainstream of IBM’s business process, but adoption was never a sure thing.

“Becoming a social business is a transformational journey,” Burnette said. “The onus has been on us to translate these systems into something that has clear business value.” As word-of-mouth has grown, the new social selling process has taken on a life of its own. “It started with us deliberately selecting the people to participate, but now it’s ballooned to the point where people are saying, ‘I want to be a part of this.’”

Read more coverage of Burnette’s session.

This is one in a series of posts sponsored by IBM Midsize Business that explore people and technologies that enable midsize companies to innovate. In some cases, the topics are requested by IBM; however, the words and opinions are entirely my own.

A large rectangular block of space was annexed in the middle of the open office and a spacious facility was constructed with spot lighting, tinted picture windows and all the latest PCs and Macs with large color monitors, color printers, a flatbed scanner and Bose speakers. There was even a NeXT machine.

The lab was christened with fanfare and highlighted in the company newsletter. It then sat unused for two years before it was quietly torn down and converted back to practical office space.

Why did the directive from the CEO of the company go unheeded? Because it was neither supported nor enforced by the managers below him. The managers – myself included – were given no incentives to make the CEO’s vision real. None of the executives used the lab themselves. Anyone who did could be observed by the entire office, as if to advertise that they had nothing else to do. The message was clear: Using the lab was equivalent to goofing off. Needless to say, people stayed away.

Unrealized Promise

That story popped into my mind last week as I was participating in a webcast with The Conference Board about internal social networks, their promise and the significant impediments that many organizations face to adopting them.

The social networking metaphor is increasingly expanding into the enterprise as a means to encourage knowledge-sharing among employees. Last month I attended Lotusphere and heard presentations by companies like 3M, Caterpillar, TD Bank North and Cemex about their successes in using Facebook-like technology behind-the-firewall.

Their stories, however, may be the exception. Recent research by InformationWeek found that less than 40% of users of internal social networks rated their usefulness as good or excellent. McKinsey reported last fall that only about half of the companies that met their definition of fully networked enterprises were able to maintain that state over time. “It appears that it is easier to lose the benefits of social technologies than to become a more networked enterprise,” McKinsey wrote.

This is despite the fact that internal social networks offer unprecedented opportunities to unlock the knowledge capital within organizations. For example, a sales rep trying to close a deal with a German company can discover an accounting employee who speaks fluent German and leverage that person’s skill to help get the business. The marketing department can discover the manufacturing employee who has outstanding Web design skills by simply posting an inquiry to the network. When employees can freely share knowledge and needs with each other, knowledge tends to bubble up in unexpected places.

Unfortunately, social networks challenge entrenched political boundaries and threaten the managers whose support is needed to make them work. They’re also incompatible with conventional organizational structures, which actually work against information sharing.

Factory Thought

Most businesses are still built upon management structures that were conceived during the Industrial Revolution to optimize operational efficiency. Job descriptions, reporting structures, departments and business units were all needed to ensure that organizations produced the necessary goods on schedule and that each participant in the process was accountable. These structures have become a burden today as challenges have shifted from process management to knowledge management.

In most companies managers are rewarded based upon the output of their group. Incentives to share resources are few; in fact, such behavior is more likely to be penalized than celebrated. The accounting manager has no reason to share the German-speaking employee with the sales rep because gains nothing from doing so and others in the department have to pick up the slack of the absent employee.

Knowledge sharing initiatives don’t work if the organization doesn’t change. Executive vision must be supported by line managers who have goals and incentives that encourage them to share their treasured resources.

Getting started isn’t that difficult. Spot bonuses, recognition in company awards programs and articles in the company newsletter can highlight desired behaviors at little cost. However, to really optimize knowledge sharing within an organization, executives need to think bigger. They need to institutionalize practices that encourage the smooth flow of information and skills across the workplace. They need to rethink the knee-jerk approach to departmentalizing everything and rewarding line managers solely on the basis of departmental performance. They need to let teams form fluidly without penalizing people who wish to contribute outside the confines of their job description. They need to let people experiment and play without fear of recrimination.

The reward is a smarter business with happier employees who are engaged in work they love. That’s a concept the architects of the Industrial Revolution never even imagined.

Speakers at Lotusphere today offered tips on rolling out collaboration platforms to employees who aren’t accustomed to the concept. The start with knowing what you want to accomplish.

At BASF Chemical, a €100 billion European chemical supplier with 109,000 employees, the goals were three fold: Encourage networking, share knowledge and improve collaboration across the far-flung organization, said Dr. CheeChin Liew (right, @twiliew), Enterprise Community Manager. The company already had a mix of stand-alone blogs, forums and wikis that had sprung up to address specific problems, but there was no integration between them. BASF Chemical wanted to see two-thirds of those silos move to a shared service within a year.

Don’t talk platforms to the users, Liew cautioned. Speak in terms that make business sense. Community managers made it a point to emphasize the value of sharing, whether through blogs, forum posts or just bookmarks. “Once people start sharing, they want to go to the next level, like file-sharing or managing a wiki. Once they connect through sharing, others will imitate them,” he said.

BASF Chemical set up webinars, learning events, demonstrations and consulting services to move people onto the new platform at their own pace. Pariticipation should be voluntary and motivated by perception of value, he said. “You want people inviting others to join the community.”

As participation grew, BASF Chemical kept the momentum growing through a demo-oriented road show, presentations by guest speakers and community exchanges. Half-day sessions built in lunch gatherings so that employees would network with each other. Informal networking is important, Liew said, and don’t start the session with lunch. Make it part of the organic learning process.

Best practices are recognized through online nomination and voting in which people recognize the accomplishments of their peers. This crowdsourcing component is an important part of nurturing the image that the network is owned by the employees and not mandate by management, Liew said.

BASF Chemical’s approach hit the mark, with participation growing from 1,000 people in the pilot phase to 28,500 after 18 months. More than one-third of new member signed up because of peer recommendations. Equally important: Most new participants moved over from existing networks, seeking to broaden their range of connections. “They joined the community to move beyond the silos,” he said.

The collaboration network now supports over 2,300 communities, which fall into four basic categories:

• Expert and professional communities are created by users to benefit the organization. They cluster around topics of professional expertise.
• Personal networks are formed by users for other users and generally relate to non-professional topics.
• Initiative and service communities are built by the organization for users and usually concern topics that the company wants to communicate to employees.
• Projects and working teams are formed by the organization for the organization and typically have a project management component

Community organizers are allowed to set their own access controls. More than half of the communities restrict membership in some way, about 15% are completely open and 30% are moderated. Don’t set rules about how open a community should be, Liew cautioned. People will choose the path that works for them. Organizations should also be prepared for a certain amount of non-work-related conversation. That’s perfectly all right if it attracts others to come on board.

Finally, it’s important to be sure you have the means to highlight success stories. Liew told of one product manager who spotted a post on the company’s Facebook page that he couldn’t decipher: “Holi hay ghar me mat bhetto.”

Google Translate couldn’t figure it out, so the product manager put the question on the network. Within 13 minutes he learned from another employee that the request was in Hindi and related to colors for a festival in India. The manager uploaded a video of BASF pigments and quickly got 35 likes and four positive comments. It was a small victory, but one that demonstrated the power of community intelligence.

Last year, Cisco started the SuperFan program to recognize its best community members. Each month, administrators recognize one fan and highlight him or her at the top of the page. Two of the monthly winners were just chose as SuperFans of the Year and celebrated on the Facebook page as well as on the Cisco Platform Blog.

Winners get no cash or large prizes, just some Cisco swag and lots of thanks and exposure. Co-winner Sandee Weiner commented, “VERY VERY proud of reaching SuperFan status with Cisco! I’m pretty passionate about technology and the way social collaboration brings folks together.”

Cost to Cisco: next to nothing. Value: a lot more than that. Next up is a photo contest challenging people to show the Cisco logo or products in the most unusual or exotic places. That’s another great low-cost idea.

So was last year’s Crazy Cabling Contest.

Seventy-two percent of the respondents report that their companies are deploying at least one technology, and more than 40 percent say that social networking and blogs are now in use.

Executives at internally networked organizations note the highest improvement in benefits from interactions with employees; those at externally networked organizations, from interactions with customers, partners, and suppliers.

Executives at fully networked organizations report greater benefits from both internal and external interactions. Developing organizations [those with the lowest rate of social media adoption] report lower-than-average improvements across all interactions at their organizations.

Self-reported operating-margin improvements correlated positively with the reported percentage of employees whose use of social technologies was integrated into their day-to-day work.

Market share leadership in an industry, the final self-reported performance measure, correlated positively with the integration of social tools in employees’ day-to-day work.

Roughly half of the internally and externally networked enterprises slid back into the category of developing organizations; that is, they did not maintain the benefits of using social technologies that they had achieved earlier…It appears that it is easier to lose the benefits of social technologies than to become a more networked enterprise, which suggests that significant effort is required to achieve gains at scale.

The respondents affiliated with fully networked organizations are the likeliest to believe that greater process change will occur in their own organizations. In larger numbers than respondents in other clusters, they think that social technologies will lead their companies to adopt entirely new processes under current conditions and to do so even more aggressively if all constraints were removed.

They say that with fewer constraints on social technologies at their companies, boundaries among employees, vendors, and customers will blur; that more employee teams will be able to organize themselves; and that data-driven decision making will rise in importance.

To my surprise, not a single tweet had been logged during the past hour. A technology that was revolutionizing the way business people communicate was being completely unused by the executives who manage technology in America’s largest corporations. As I began prodding my network of CIO contacts, I learned that this was not unusual.

Most CIOs are taking an attitude of, at best, benign neglect toward social networks. A large percentage of them are still actively blocking employee access to sites like Facebook and YouTube. The most recent research by Robert Half Technology found that 31% of U.S. companies block social networks completely and 51% limit access to business purposes only. While those numbers have improved from two years ago, they still indicate an entrenched suspicion that social networks are at best time-wasting extravagances and at worst latent security threats.

Same Old Song and Dance

These fears are legitimate, but we’ve heard them before. The argument that employees will waste time on new technology goes back to the introduction of the personal computer. CIOs also closed ranks against Internet-based e-mail and the Web itself in the early days of those technologies, citing fears that employees would use their new toy computers for games or would subvert the central control of the IT organization.

In fact, that’s exactly what they did. And given access to social networks at work, people will use them to play and waste time. CIOs should not only accept this fact but embrace it.

Anyone who has children knows that playing is one of the most effective learning techniques humans have. Experimentation unearths ideas that have practical applications. On the early Web, people “surfed.” In the process, they learned the skills that have redefined office productivity. Today, the people who can quickly find, organize and interpret information are among the most valuable in the workforce. Playing pays off.

In its formative years, social media has been largely relegated to marketing departments under the assumption that it’s just another form of communications. BtoB magazine asked 375 marketers last year who was primarily responsible for social media within their companies. Only one person identified the IT department. My anecdotal observations pretty much echo that. CIOs just don’t see social as part of their charter.

What a shame, because social technologies has about as much to do with marketing as enterprise resource planning (ERP) does with accounting. This is about the finding new ways of doing business with a customer base that’s empowered with information. It’s the very center of where business is going.

Demand-Driven Economics

In their book, How Companies Win: Profiting from Demand-Driven Business Models, Rick Kash and David Calhoun argue that developed economies are in the process of transitioning from supply-constrained to demand-driven. We are awash in goods and services today, they point out, and prices are flat to declining in many markets. That means that there’s little incremental benefit to be had from making supply chains more efficient. In the future, value will come from generating demand that never existed, as the iPhone has done.

A decade ago, CIOs played a key role in implementing ERP and optimizing supply chains in many companies around the globe. While some of that was a byproduct of the Y2K problem, their willingness to lead such mission-critical projects was a feather in their cap.

Now the rules have changed and the new challenge is to drive demand. The information-empowered customer will impact every business at every level. We are in the first stages of the shift in market conditions from supplier push to customer pull. Understanding the dynamics of these new interactions and organizing businesses around them will be the major business challenge of the next five years.

Why would CIOs not want to be at the center of all that?

John Dodge agrees with me. Writing on the Enterprise CIO Forum, he suggests that one reason CIOs aren’t more active in social business is that they see themselves as analytical types, making their skills ill-suited to social interactions. That may be true, but I’d argue that analytical skills are sorely needed to help companies make sense of the cacophony of conversations going on around them and their markets. Social business isn’t just about engagement, but also about listening and understanding. CIOs have a lot to contribute by applying algorithmic discipline to that process.

Love Your Critics

The CMO Site likes to stir things up, so my posts there tend to be on the controversial side. In Why Brands Should Love Public Complaints, I make the case that your critics can be your strongest allies. Why? Because a little negativity reinforces the validity of the positive comments you publish.

The whole concept of enabling negativity to appear on your own website rubs a lot of marketers the wrong way, but I’d argue that it’s great for building integrity. The article notes that Epson reported that revenue per visitor nearly doubled after it started including customer reviews on its site. The fact that one out of 10 customers may displeased with product can be looked at another way: 90% are happy.

The right approach is not to deny that you have unhappy customers; everyone’s got a few. They’re going to vent their frustrations anyway, so encourage them to do it in a place where you can respond and juxtapose their opinions with the vast majority who are satisfied.

Read more and comment on The CMO Site.

Good Riddance to the Corporate Case Study

In this post I rant just a bit about corporate case studies, those pervasive and largely useless vessels of happy talk that no one really believes. Corporate case studies used to have a purpose in the days when customers couldn’t find each other, but today all it takes is a few searches or LinkedIn queries to identify experienced buyers.

It’s not the concept of the case study I don’t like; it’s the format. Once the legal department gets involved in approvals, most meaningful content gets sucked out of the article. Case studies also don’t answer the questions prospective buyers really have. That’s why prospects have always viewed case studies with suspicion. Today, they mainly ignore them.

So rather than investing time and dollars in paying writers for stories that no one believes, why not focus on greasing the skids between your happy customers and your prospects? Make it easy for the two parties to connect and then get out of the way.

Read more and comment on The CMO Site.

The Futility Of Whisper Campaigns

PR practitioners who undertake influencer relations programs often discover an odd disconnect between them and traditional media relations: Bloggers don’t operate by the same rules as reporters.

The recent example of this disparity ended up embarrassing a prominent PR firm, and I analyzed the story in BtoB magazine.

In case you missed it, early last month a pair of new employees at Burson Marsteller, both of them veteran journalists, contacted a security blogger and offered to help him write and place an op-ed piece that exposed “sweeping violations of user privacy” by Google.

It turns out the blogger was more interested in the motivations of the PR firm than in Google’s allegedly intrusive behavior. After he posted the e-mail exchange online, some USA Today reporters dug up the fact that Facebook was behind the whisper campaign.

Burson, which claims to be social media-savvy, did exactly the opposite of what it would counsel its crisis communications clients to do: It clammed up. The incident was a huge black eye for the agency and a lesson in how not to pitch a blogger.

Read more and comment on BtoBOnline.

Do You Need A Social Media Specialist? Yup.

My latest column in B2B was actually sparked by a conversation I overheard on a plane. A guy in the seat behind me was railing to his companion about the idiocy of hiring social media specialists. In his opinion, everyone in a company should learn to use the tools. Expertise shouldn’t be concentrated in one person or department.

I agree with his second point but I couldn’t endorse his overall premise. Nearly every company I’ve encountered that is succeeding in social media has a center of excellence. They are delegating social interactions to one person, but they’re shortcutting the learning process by hiring people who can train others. In this column, I explain why a social media expert can save you time, money and embarrassment (see Burson above).

What’s your approach? Read more and comment on BtoBOnline.

IBM engineers celebrate Watson's victory (from an IBM YouTube video)

Earlier this week I wrote an article for SocialMediaB2B.com that made the case that last week’s IBM Watson Jeopardy challenge, in which an IBM computer thrashed the two greatest Jeopardy champions of all time, was the greatest B2B marketing campaign ever.

One reason I liked it so much is that IBM let scientists – instead of corporate suits – tell the story of their achievement. This was documented in more than 30 videos that IBM posted on YouTube as well as chat sessions and group Q&A interviews on the website reddit.com.

If you want to see the passion that the IBM scientists brought to this project, watch the 11-minute summary video that was posted shortly after the contest ended. It’s clear that Watson’s accomplishments were more than just a technology triumph. Researchers reacted as if their child had just graduated from Harvard. Their passion was contagious and genuine.

Why don’t more companies let the people who build and support their products come out of the shadows the way IBM did? In part, I believe it’s fear that people will do the wrong thing. It also reflects the time limitations that developers and engineers themselves often cite as a reason to stay in the shadows. Let’s look at each in order.

Tell Stories

B2B customers have intense information needs, and their questions are often best answered by the people who build and service the products they use. Some companies understand this. One of my favorite stories from Social Marketing to the Business Customer is Indium Corp., which built a constellation of search-optimized blogs that put their engineers directly in touch with the people who buy their highly specialized products. Result: 600% jump in leads in six months. Marcom Director Rick Short (left) says his job is to “get engineers talking to customers and then get out of the way.”

Do unofficial spokesmen sometimes say the wrong thing? Sure. Does it matter? Not really. Corporations are far too sensitive to the indiscretions of individuals, which usually can be sidestepped with an apology or explanation. A couple of hours of media training does wonders.

Blogs Are the New Trade Shows

The issue of time commitments and availability is valid, but usually overstated. Many engineers are only too happy to write papers and travel thousands of miles to deliver presentations, yet writing a 500-word blog entry or recording a how-to video is seen as overwhelming.

There’s a contradiction here. Engineers naturally like to share, and they know that conference presentations are good for their careers. Contributions to the company’s social media programs potentially reach a much larger audience than a presentation at a trade show. They go to the trade show because that’s what’s always been done.

I wish more corporate marketers would adopt Rick Short’s philosophy and see themselves as facilitators rather than spokesman. They should be the ones urging recalcitrant executives to draw contributors out from behind the curtain. They should have the statistics to demonstrate that the blog reaches a larger audience than the trade show. They should be the ones positioning customer communications as a privilege, not a chore.

The best way to encourage individual contributors to participate in your social media programs is to celebrate them. That doesn’t have to cost a lot of money. Recognize contributions to the corporate blog in your employee newsletter, or hand out awards for the most prolific or creative contributors every quarter along with a small gift certificate. When people see that their involvement is good for their careers, they quickly come on board.