Tribes Rule the Hyper-Social Organization

Posted on September 8, 2010 by Paul

I’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.

Weinberger Wisdom

Posted on June 4, 2010 by Paul

My definition of a good speech is one in which the speaker tells you something you already know in a way that you’ve never considered before. That’s why David Weinberger is one of my favorite speakers.

Here are my notes from David’s presentation this morning to the Mass. Tech Leadership Council’s Social Media Summit. These are adapted from my tweets from the event, but hopefully are self-explanatory. They’ve been cleaned up and expanded for clarity:

The Web has always been social. The only difference with Web 2.0 is that it’s easier to build a presence.
The page-centered Web paradigm has yielded to a people-centered one.
Apple is about art. Google is about scale. We don’t know yet what Facebook is about. That’s unsettling, because Facebook is to the social Web what Google is to the Web.
Media is frequently mis-characterized as publishing. The definition of media is that which mediates between parties. Media isn’t content.
We are the media. We recommend knowledge to each other. New media transforms as it moves, unlike traditional fixed media like TV. Telegraphs are a fixed medium for sending messages. The Internet sends messages but it isn’t fixed. It changes every second.
We take on properties of our media and our behavior comes to reflect the media we use. For example: The phone is intermittent, interuptive communications driven by a reason to make a call. The Web is rolling sets of instantaneous, always changing fragmented networks. These networks may be transient or last a lifetime. This is a completely different model than traditional media.
Network sociality is more like a party than a phone call. Telephones are interruptive; the Internet is distractive. People interact with the medium differently.
In the days of broadcast, markets were abstractions created by advertising. Now they are real and social.
Transparency is now an imperative. For example, on Wikipedia you can always find out why an item of information is there. The entire process is open. More businesses will operate like this.
We are getting comfortable with fallibility. The most popular stuff on YouTube is about humans screwing up. This doesn’t embarrass us as much as it used to. This acceptance of our own weaknesses will change the way organizations operate.
People don’t buy drills or holes. They buy a nice place to hang towels to impress their relatives. Abstract to the level of basic human needs in order to understand behavior. This also works in marketing, BTW.
There are four types of transparency critical to Social Media: sources, self, humanity, interest.
Newspapers traditionally provided a curated mix of content reflecting a professionally derived combination of what we wanted to know and what we needed to know. News about Sudan is an “eat your broccoli” story. We don’t like it, but we need to know it. It’s not clear where we will get that kind of information in the future.
The social media generation now expects important information to find them. That’s a dangerous attitude.
Diversity is important but uncomfortable. Without shared interests, it’s hard to converse. When you have a truly diverse group, you get smalltalk because people don’t have a common platform for conversation. Nevertheless, diversity is important. We must fight the tendency to stick with people like us. Diversity requires conscious discomfort. We want to interact with like-minded people.
Media is increasingly an echo chamber in which we choose to listen to people who share our views. Echo chambers are bad for democracy and culture, but marketers like them because they say what marketers want to hear. Echo chambers aren’t necessarily bad, but if that’s the only place you ever talk, you’ll never hear other points of view.

The Web Is Going Social

Posted on May 27, 2009 by Paul

If you’ve signed up for more than a couple of social networks, you’ve undoubtedly experienced the syndrome of seeing your mailbox clutter up each morning with notifications about messages, invitations or comments you’ve received from other members. This deluge can become so annoying that you may simply choose to relegate many of these notices to the black hole of your spam filter.

Welcome to the dirty world of the early social Web, a time of chaos and incompatibility that is stifling the real utility of these marvelous new networks.

If you’ve been around for a few years, you may remember a similar state of affairs from the pre-Web days. Back in the early days of electronic mail, users of CompuServe, America Online, Prodigy and other branded networks were unable to exchange e-mail with non-subscribers. Even after Internet e-mail had been broadly accepted, America Online clung to its members-only prohibition for some time in the foolhardy belief that it could force members to stay within the fold.

Today’s social networks suffer from some of the same limitations. Each has its own profiling system, internal messaging, collaboration systems and applications. Some aggregators like FriendFeed gather up member activity from multiple sites, but such services are mainly limited to collecting RSS feeds. There is no such thing as an integrated online profile.

This profusion of information smokestacks won’t last. Two competing standards – one from Facebook and the other from Google — are duking it out to create a standard single identity that travels with Web users. If you’ve signed in to Google and looked up your own name recently you’ve probably noticed that Google now prompts you to fill out a profile. This sketchy self-description is the beginnings of a broader reach by Google to make the entire Web into a social network.

In the socialized future, people’s identities will travel with them and their details shared selectively with others within their social network. Profiles will develop incredible richness as details of each person’s preferences, connections, memberships and activities are centralized. It will probably be a year or two before this concept begins to take shape. Regardless of whether Facebook or Google wins the standards war, the social network metaphor will become ubiquitous.

Social Colonies

Forrester analyst Jeremiah Owyang has called this next stage of evolution the “era of social colonization.” Once every website takes on social network characteristics, the utility of the Web will change dramatically. We will increasingly rely upon the activities and recommendations of others to help us make decisions. Sites like Yelp, ThisNext and Kaboodle already provide a rudimentary form of this functionality, but they are limited by their closed nature.

One social bookmarking service I use - Diigo.com – provides a glimpse of what the social Web may look like. Diigo (and a similar service called WebNotes) enables members to highlight and comment upon Web pages or passages and share them with others in their network. Visitors can read and add to existing comments in the same way that editors annotate and build upon a draft document. Imagine if the capabilities were expanded to include star ratings, multimedia, discussions and other interactive features. That’s when the social Web really gets exciting.

The ripple effects of this shift should be dramatic. Imagine a future in which your company homepage becomes a giant group product review. Forrester’s Owyang foresees a future in which marketing becomes oriented around customer recommendations. There will be no choice. Companies may lose control of the messages on even their own websites as visitors share their own impressions.

Owyang also believes companies will have to customize their Web experiences as visitors selectively share information about their interests and preferences. This information will become a kind of currency. We will grant brands and institutions selective access to information about ourselves in exchange for discounts and specialized services. The shift from mass to custom will take a giant step forward.

Today’s social networks are no more representative of the Internet of the future than Prodigy was of the Web we know today. These will be incredibly exciting developments to watch. We just have to get past the necessary evil of a standards war in order to appreciate them.

How to Get Started With Social Media

Posted on January 22, 2009 by Paul

The Massachusetts Technology Leadership Council held an informative seminar at Communispace this morning entitled “Getting Started with Social Media — Lessons from the Front Lines.” I took notes of the comments by the four speakers and pulled out a few highlights to share:

Perry Allison (left), Vice President of Social Marketing Innovation at Eons.com talked about the value of gathering detailed feedback from a small number of people. Referring to a project that Eons conducted with Quaker Oats, she said she was initially concerned that only 80 members of the baby boomer site offered comments. “I thought Quaker wouldn’t be excited about 80 members, because this is a company that advertises on television to millions. But the brand manager was ecstatic because of the feedback and insight they were getting.”

It’s the engagement that gets clients energized, she said. “Advertising currently drives more revenue, but what gets brands most excited is engagement marketing.”

Allison offered a list of common mistakes that companies make in creating online communities: “Overloading people with information, not having a clear concept of the goals, not defining a clear value proposition, using marketing speak, and viewing the destination as a thing rather than a process.” That last point is particularly important. Markers have been taught to treat campaigns as projects with defined beginnings and ends. But customer communities, if well managed, can last for years. The value is in the process, not the deliverable.

A couple of the panelists commented on the dilemma facing mainstream media organizations today as their power is eroded by the influence of new sources.

Pam Johnston (left), Vice President of Member Experience at Gather.com, brought an interesting background to the discussion. She spent more than 15 years in television news before joining Gather, which means she understands the mainstream media mindset. The most disruptive force in social media is its ability to define new trusted sources, she said. “People are looking for a trusted source and it may not be the Boston Globe. It may be your neighbor.

“I can tell you from experience that traditional media don’t want to be a hub,” she said. “They have a top-down mentality: ‘If you want it, you have to come to my site to get it.’”

Dan Kennedy, Assistant Professor at the Northeastern School Of Journalism and author of the Media Nation blog, was even more blunt about the challenges facing mainstream media. “The question of how news organizations are going to monetize anything they’re doing is the question facing the industry right now. The Boston Globe may have the largest audience its’ ever had and it’s losing $1 million a week,” he said.

Brian Halligan, CEO of HubSpot, offered a five-step approach to getting started with social media:

1. Start a blog. It’s a living breathing thing.

2. Create interesting content. If you do that, people will link to you.

3. Publish everywhere: Use Twitter, Facebook, FriendFeed and any other channel you have available.

4. Optimize for search engines. If you’ve got a good pithy title (Top 10 Tips, anyone?), then publicize it. Make it easy for people to post your content right to Twitter, Digg, Facebook and other destinations.

5. Measure it. Look at your traffic, page views, unique visitors, time spent on site. That’s how you know whether your hard work is paying off.

Sound easy? Creating remarkable content isn’t instinctive for everyone. That’s why Gather’s Johnston was dismayed when Burger King backed down last week on its audacious “Whopper Sacrifice” campaign on Facebook. The program got lots of attention for originality, even if its premise – members “unfriended” others in exchange for free hamburgers – was controversial. Burger King yanked the campaign last week over complaints that it was encouraging antisocial behavior.

“It was probably the most successful campaign Facebook has ever done,” she said. “I thought it was funny and memorable. It got people talking and those are important qualities for a memorable campaign.”

On the always popular issue of return on investment, Halligan had this to say: “Most of our customers create a LinkedIn group or Facebook page and see, on average, a 13% month-over-month growth in leads. I’d advise jumping into this. You don’t need venture backing to start a Twitter account. If you’ve got time and energy and something to say, then do it.”

Finally, Halligan got my vote for best quote with this one: “”Marketers are lions looking for elephants in the jungle. But the elephants have all left the jungle and they’re at watering holes out on the savannah. Those watering holes are called Google and Facebook and Twitter and Gather and Eons.”

So get your tail out of the jungle.

Colleges Race Ahead in Social Media Adoption

Posted on January 20, 2009 by Paul

New research shows that educational institutions are leveraging social media far more effectively than businesses in finding and recruiting their key constituents: students.

Perhaps in recognition of the fact that high school students are already thoroughly invested in social networks and online video, college recruiters are using these techniques to identify candidates. The tools are particularly popular at small institutions, which probably appreciate the cost efficiencies that online promotion provides. For example, the research found that nearly 8 in 10 private colleges use blogs for recruitment.

“Social Media and College Admissions: The First Longitudinal Study” was conducted by Nora Ganim Barnes, Ph.D., a Senior Fellow and Research Chair of the Society for New Communications Research and Chancellor Professor of Marketing at the University of Massachusetts and Eric Mattson, CEO of Financial Insite Inc., a Seattle-based research firm. It compares adoption of social media between 2007 and 2008 by admissions offices of four-year accredited institutions in the US. The findings are based on 536 interviews with college admissions officers.

Among the top-level results:

Adoption by admissions offices grew from 61% in 2007 to 85% in 2008.
Forty-one percent of college admissions departments have blogs, compared to 13% of the Fortune 500 and 39% of the Inc. 500.
Nearly two-thirds of college admissions officers now say they are “very familiar with” social networks and 17% use social networks to research prospective students. These tools are often used to protect the school from potential embarrassment.
Video is now being widely used to deliver virtual tours of campuses, virtual visits to the dorms, and sample lectures from the faculty.
Seventy-eight percent of private schools have blogs, versus 28% of public schools; 50% of schools with undergraduate populations of less than 2,000 have blogs.
Four out of ten of institutions not currently using social media plan to start a blog.
Nearly 90% of admissions departments feel that social media is “somewhat to very important” to their future strategy.

You can download the executive summary here.

How to Keep a Fiskateer Happy

Posted on October 31, 2008 by Paul

In the first chapter of Secrets of Social Media Marketing, I write about Fiskars, the Finnish maker of fine cutting tools that uses a community of scrapbooking enthusiasts called Fiskateers to evangelize its products to specialty craft retailers. It’s a perfect example of how to use social media to create street-level awareness.

My wife, Dana, wasted no time in applying to become a Fiskateer, and last weekend she attended a gathering of her fellow crafters in central Massachusetts sponsored by Fiskars. What a bounty of gifts they received! Dana counted no less than 15 raffles for the 28 attendees. She won four of them and carted home about $500 worth of swag. To the left is a photo of the goodies.

Fiskars sent lead Fiskateer Kelly Jo as well as one of its “Fiskaneers,” which is what the company calls its engineers There was also a representative of Brains on Fire, the media agency that conceived of the community. Fiskaneer Doug chatted with the group about ideas for new products, yielding great insight from dedicated crafters. The attendees were treated to plenty of food and a trip to the nearby Yankee Candle superstore. The spent the rest of the afternoon crafting together.

Did Fiskars overdo it with the sheer quantity of stuff it gave away? I doubt it. These 28 women have already declared their allegiance to the brand, and giving them more incentive to promote Fiskars through their online and offline social networks can only help boost word-of-mouth marketing. The group has been designated “crafting ambassadors,” only it’s clear that the brand they favor is Fiskars. By harnessing their enthusiasm, Fiskars can extend the value of a few gifts to a much broader audience. The cost of goods for this exercise is cheap compared to the value of good cheer the participants will spread.

Digg Setback Calls 'Wisdom of Crowds' Into Question

Posted on October 9, 2008 by Paul

Journalism junkies have been closely watching the example of Digg.com to see if the wisdom of crowds really is better than the judgment of editors. According to David Chen, it isn’t. Writing on Mashable, Chen offers a detailed deconstruction of Digg’s recent decision to jettison some of its top users, apparently for trying to manipulate the system. The weeding-out process was positioned as a routine cleanup intended to eliminate abusers of the community adjudication process, but it was actually an acknowledgment that decision-making by the masses has serious flaws, Chen concludes.

It’s been common knowledge for a couple of years that the Digg model lent itself to manipulation by a small number of people. In fact, there’s evidence that up to half the stories on Digg’s enormously influential home page were contributed by just 100 users. By taking draconian action to ban members who had, in some cases, contributed hundreds of hours of effort to building the site, Digg is admitting that it has been unable to figure out an algorithmic solution to the abuse.

The problem isn’t in programs, but in people. Individuals can attain fame within the community by contributing stories that are ranked highly by other users. Active members discovered early on that by forming “friend” relationships with many others, they could enhance their performance and popularity. In other words, the more you voted for another member’s contributions, the more the other member voted for yours. As time went on, an elite corps grew more powerful, to the point that their contributions can achieve high visibility regardless of merit.

“In the years following its creation, Digg became less a democracy and more a republic, with a select few users responsible for the majority of front page stories,” Chen writes. Digg has tinkered with its settings to try to mitigate this factor, but some members responded by writing scripts that routed around the problem. It became a giant cat and mouse game that eventually forced Digg to insert human editors at some levels to arbitrate the process. So much for the wisdom of crowds.

Chen contends that the blockade may irreparably damage Digg’s reputation, although the site will continue to be a huge source of traffic for publishers who are lucky enough to be listed there. At the very least, the conundrum points out the limits of a purely democratic model of news judgment. Even successful sites like Wikipedia rely up a small cadre of elite editors to make most of the important decisions. People with significant experience in online communities agree that a very tiny percentage of members contribute the vast majority of content. It appears that editors, whether bubbled up from the community or appointed by management, are inevitably needed to maintain order

Should this be taken as a condemnation of the community journalism model and validation for the rule of editors? Absolutely not. As Wikipedia has demonstrated, armies of ordinary people can create a phenomenal information resource. However, leaving all decision-making to a group without providing rules or oversight invariably results in the ascendance of an elite. in the case of Wikipedia, that elite is self-regulating. In the case of Digg’s more juvenile crown, it’s a frat party.

Social Network Adoption Races Ahead

Posted on September 18, 2008 by Paul

Awareness, Inc., which has been in the social media software market for several years, has just come out with a new research report on enterprise adoption of Web 2.0. There are some interesting findings that I wanted to share with you. You can download the entire report after filling out a short registration form.

My basic take-away is that social media tools are ripping through the enterprise with amazing speed. Whether used internally, externally with open enrollment or externally with invitation-only enrollment, social networks are proliferating as business tools. Some highlights:

The number of organizations that allow employees to use social networks for business purposes has increased dramatically to 69% in 2008 from 37% last year;
More than six in 10 companies are using social media to build and promote their brands, improve communication and increase consumer engagement;
There has been a fivefold increase in the percentage of employees who use popular social networking sites like Facebook and LinkedIn for business purposes, from 15% in 2007 to 75% this year;
While only a tiny percentage of organizations are currently using internal communities, one in three plans to use them in the future;
A quarter of respondents say their companies are planning to deploy external-facing communities, which is double last year’s total;
Some 37% of organizations plan to focus communities on specialty areas where they can provide focused business value;
More than 40% of respondents report using one or more of the following tools: user groups, tags, communities, blogs, social networking and videos;
The most popular internal tools are social networks, blogs and wikis, with adoption rates of between 50% and 55%;
Seven in 10 respondents say their companies plan to deploy external blogs.

One of the most notable trends this research reveals is the rapid acceptance of social networking not only for marketing and customer support, but also for employee communications. When you consider that Facebook was barely known outside of the academic realm just two years ago, the acceptance of this technology for internal knowledge management is remarkable.

I’m also intrigued by the findings that seven in 10 businesses allow employees to use social media during business hours. This is a big change in corporate attitude. In the first couple of years of social media, businesses moved slowly to permit employees to speak outside the company walls. There were fears about people revealing company secrets or saying inappropriate things in public forums. Those fears appear to have largely melted away.

The lack of horror stories combined with the powerful utility of features likeLinkedIn’s Answers forum are clearly overwhelming these reservations. It turns out that when you give people the freedom to speak on behalf of the company and combine that freedom with clear guidelines about what’s appropriate to say, the vast majority do the right thing. This is inspiring and affirming. It may be an unanticipated benefit of social media acceptance, but it is a very welcome one.

Caveats: Any research conducted over the Internet needs to be taken with a grain of salt. The Awareness survey accumulated responses from 160 people, of whom 27.5% were from large companies and 40% were at a management level. Awareness says statistical accuracy is +/- 7%. Awareness also has a vested interest in promoting acceptance of social networks. However, the company used an independent research partner, Equation Research, to conduct the survey and I don’t think it has any incentive to fudge the results.

paulgillin.com

Social Media and the Open Enterprise

Category Archives: social networks