With the February 1 announcement of its mammoth public offering, Facebook is basking in the limelight. The $1 billion (in annual revenue) Silicon Valley darling, along with LinkedIn, GroupOn and Twitter, is yet another reminder of the dramatic impact that the social, mobile and cloud revolutions are having on customer communications and shareholder interest. Is it time for boards, and their directors, to reinvent themselves to keep pace? Yes, according to this opinion piece by Barry Libert, CEO of OpenMatters, a company that invests in social technologies and advises boards of directors and executives on the impact of new technologies on corporate governance and enterprise risk management.

Let’s start with today’s reality. The world has changed but corporate boards haven’t kept pace. How do you know? Ask most boards what they monitor and measure at their organizations. There’s a big chance that most of them will say they are monitoring and measuring financial results, compliance and legal risks. Then ask them if they monitor and measure the impact of new technologies on their operations, including the social communications between their customers, employees and shareholders, and the answer will most likely be no. And finally, ask them if they know what the risks and costs are of not using these technologies to communicate and collaborate with stakeholders, or having the insight they provide. Once again, the answer will often be no.

What’s surprising about such responses is that boards know that solid decision-making is essential to mitigating risks and ensuring the viability of their enterprises. How is it, then, that most of them don’t have a grip on the operational value these technologies offer, or the critical “big data” — about customer sentiment, employee engagement and investor insights — that they produce? The answer: They’re still using corporate governance tools and strategies that were developed in an age that was neither social nor mobile, or ever considered that the “cloud” would exist.

In short, today’s corporate directors have the “necessary” skills in terms of compliance and financial performance, but not the “sufficient” skills in terms of strategic or technological know how. Why? Because for years, astute corporate directors believed the tools that companies like Facebook and Twitter offered weren’t essential. In their view, these new means of communications were for kids, had little, if any, business value, and created minimal strategic, operational or financial risks. Wow, were they wrong.

Now maybe you are part of the majority of board members who don’t use social media. Maybe you believe your board and organization don’t need new skills taking new technologies into account because they don’t apply to your industry. Or maybe you believe your customers, employees and shareholders aren’t social or aren’t mobile. Think again.

As you read this, there is a good chance your customers and employees are sharing their knowledge about your organization and its products, services, research and culture with customers and employees at other companies. If you don’t believe me, check out employee feedback on Glassdoor.com or Amazon’s online price comparison tool. And remember that the corporate directors of Kodak, Blockbuster and Borders also possessed the necessary, but insufficient, skills to compete in a social and connected world. Further, ask them how their lack of digital technologies expertise impacted them.

The good news is that if you are among the majority of corporate leaders and think you are ill equipped to deal with today’s technology realities — as various recent surveys suggests — it’s not too late to reinvent corporate governance and your board. If you don’t want to go the way of Borders and the like, you and your fellow corporate directors have the chance to update your skills and build a high-performance board. But to accomplish this goal, corporate directors need to add deep technology and strategy knowledge to existing Sarbanes Oxley and financial reporting expertise. To get started, below are seven steps you and your board can follow to get a handle on today’s enterprise risks.

Step 1: Strategy

Build and foster your employee and customer social networks. Good products and great service are no longer enough in a flat world in which new competitors emerge everyday from around the globe to steal your customers and prospects. Success today requires fans who sing your praises to their friends and to other fans, as well as employees who think your company, and its culture, are top-notch. Achieving that requires vibrant social networks that are aligned with your business.

Action: Have your management team put together a presentation for the board outlining their ideas for creating and fostering customer, employee and partner social networks that can help mitigate risks and generate returns in the near and long term. (Watch theCommoncrafts slide show on why social networks get things done better.)

Step 2: People

Recruit corporate directors who understand today’s technologies. Because we are moving from an industrial and information age to a social age in which everyone uses smart, mobile devices to connect with others, directors need to embrace social technologies and the data and analytics they generate. According to Deloitte’s 2011 Board Practices Report, 9% of boards say they have IT expertise and 1% or less have members who have CTO or CIO experience. Without more of that expertise and experience, a board will have skills that are behind the times, no matter how proficient in Sarbanes-Oxley they are.

Action: Rebalance your board’s skills and recruit corporate directors that have the strategic competencies, technological know-how and big data expertise derived from operating in the social and mobile world. Directors need to understand more than just core technologies to help their enterprises reduce the risks related to customer churn, employee unhappiness and shareholder activism. (Read “The Digital Director” from Spencer Stuart on why new board recruitment strategies are critical.)

Step 3: Processes

Implement open, collaborative processes to innovate and grow. Every product and service ever created is the result of customer demand or employee creativity. But now, open innovation, enabled by social technologies, is a far more effective approach for capturing the knowledge of customers, employees and partners, whose expertise is everywhere. By building “crowd-sourcing” expertise as a board, development risks can be mitigated as your company learns to harness the energy of your empowered, connected ecosystem.

Action: Find out how your management team is harnessing the power of crowds and what collaborative technologies they are using to gain insights from the people the company serves and who serve you, including customers, employees and partners. (Read McKinsey Quarterly‘s “Wiring the Open-source Enterprise.”)

Step 4: Technology

Require directors and executives to embrace today’s technologies. Facebook used the Internet to assemble an enormous customer base at a low cost. Apple built one of the most valuable companies in the world by getting mobile and going to the cloud. Board members can’t appreciate the value of these technologies unless they use them, otherwise they will unknowingly create risks. Ignorance in this case is not bliss.

Action: Equip the board and the executive team with social monitoring tools, smart devices and collaborative technologies so that they experience these technologies directly. (ReadMcKinsey’s quantitative research on how leaders are benefitting from web 2.0 technologies.)

Step 5: Finance

Measure and manage what matters to insure success. More and more, financial metrics are not enough to help a board understand what is really happening in their businesses and where the value is created or risks reside. In today’s Facebook world, enterprise value (E) increasingly equals the number of networks and size of each network (Mass) times the insights exchanged among network members (Content) and the speed of this exchange that is enabled by technology (squared). Einstein was right, even if he wasn’t an economist: E =MC².

Action: Boards need new key performance indicators, including customer sentiment, employee engagement, partner interaction, network size and investor emotion. Turning a blind eye to these metrics and insights is not an option since financial metrics don’t paint the full picture of risks or potential rewards. (Find your social business index on Dachis Group’s site.)

Step 6: Values

Make business personal. After all, it is the social age. Not long ago, employees were loyal to the core as long as the monthly paychecks kept coming. Customers were also loyal, especially when they had a limited choice of products and services. Not anymore. Today’s employees are empowered and interconnected and consumers comment online on myriad products and services. Business is personal in today’s social world, and peer advice carries more weight than corporate leadership does in our decision-making.

Action: Seek leaders who embrace today’s new leadership skills involving emotional (EQ) and social competencies (SQ). The old skills of PQ (command and control) and IQ (intellectual power) are no longer sufficient. (View Dan Pink’s video on what employees really want and need to achieve greatness.)

Step 7: Rewards

Implement recognition systems that motivate all your stakeholders. Apple has shown the power of creating a network of participants to help create, market and sell new products and services faster and better than if it worked alone. At its App Store, you’ll find more than one billion applications being sold by independent developers, who share their revenue with Apple.

Action: Yoda of Star Wars said, “Do or do not. There is no try.” If you want your board to serve investors by delivering good returns on the capital that they have provided, look at new compensation and reward systems for customers and employees. Ask executives to review Apple’s approach and see if it makes sense for your company to consider. (Read Pew Research Center’s report on the power of social media within enterprises.)

Having spent the last decade investing in social media and open-innovation companies that now manage 15,000 social networks for 350 brands, I understand why Facebook was able to build a company with nearly one billion customers in less than a decade. The simple and sad truth is that corporate directors didn’t prize their relationships and as such they ignored or underinvested in their stakeholders’ desires to connect, communicate and collaborate. It’s also clear why Apple became such a valuable company: People the world over want their knowledge and relationships to be as mobile as they are.

Whether at a for-profit, not-for-profit or government organizations, all corporate directors need to understand the risks of not being social or mobile or operating in the cloud. More important, companies like Facebook and Apple are setting the foundation for great corporate governance and the skills your board needs to compete when 1.2 billion customers are connected. If your board wants to mitigate risks and deliver shareholder value, they need the skills that are both sufficient and necessary. There’s no time to waste in today’s social, mobile and cloud world.

Read the full press release…

In today’s innovative world, it is not as important to ponder whether the chicken or egg came first. Instead, it is more important to understand how the chicken defines the egg and how the egg defines the chicken. In other words, to come up with new products, one must understand the how interrelated popular products define each other. Then, by understanding how a product’s definition is impacted by other popular interrelated products, one can hope to understand how to redefine and improve – and innovate – new products.

A case in point is Apple’s iphone. Did the iphone come first or did all of the available applications on the phone come first? The answer to this question is not as important as asking how the plethora of available applications defines the iphone. Without these applications, the definition of what the iphone is would be much different. It might just be defined as a phone that mimics the tool set available on a laptop. Instead, it is a GPS; it can replace the need for an airline boarding pass; it can be anything that the applications define it to be.

So, the next time you are trying to be innovative, look at how the current set of hardware, software and other tools interact in your product’s user space. Decide how the product’s definition could be changed to be even more attractive to the end user. Once you have come up with a better definition, new and innovative product ideas will become more obvious.

The real question is not about the chicken or the egg. The real question should be, what comes first, innovative product ideas or new definitions for existing products? Me thinks the latter.

Posted by my friend, Doug Malech <dmalech123@gmail.com>

Within 6 months, I was an invalid.  My strength had dissipated to the point at which I could no longer feel my legs.  I lost most of my feeling below the knees and what little feeling I had was unbearable!   I was sick and isolated.  None of my friends had ever had a problem like this, and my doctors couldn’t figure it out.   My wife wheel chaired me around to 20 plus specialists at the best hospitals in Boston – Mass General, Brigham and Women’s, and Beth Israel Deaconess.  We saw neurologists, orthopedic surgeons, neurosurgeons, as well as vascular specialists.  My differential diagnosis included, among other conditions:  multiple disc ruptures in my spine; dual tarsal tunnel syndrome in my ankles; late onset Diabetes; as well as a rare version of late onset Muscular Dystrophy – the outcome of some of these conditions being that I would be unable to walk for the rest of my life.  My wife and I didn’t know where to turn, whom to trust or what to do.   My boys were panicked and my parents were grief-stricken as they watched their oldest son suffer with a set of debilitating symptoms no one could diagnose.  In short, my wife and I were alone and afraid.

To add further insult to injury, my father-in-law, whom I loved dearly and who was my ‘buddy’ for the last 27 years, died the night before I was schedule to have surgery to correct the disc herniation that some doctors believed was causing my problems.  WOW.  Was that a terrible set of events?  That next morning, when I went in for surgery, the surgeon told me I would walk out that night.  Rather than walking out, I fell to the floor, having lost power to my legs as a result of the surgery.  Six weeks later, after multiple additional consultations, I had my second back surgery.  This surgeon told me that if all went well, I would walk again in 6 months. Can you believe it?  Six more months of not walking!   I couldn’t believe it.

It is now 22 months since the beginning when I lost all feeling in my legs.  If you are wondering how I am doing – I can tell you that I am recovering – but not fully recovered.   I wouldn’t want what happened to my family and me to happen to anyone else.  My life as I knew it is over due to a combination of factors – many of which will never fully be understood by anyone – even the best and brightest doctors that Boston has to offer.

But there is a bright side:  I was given a new lease on  life — not my original life, for sure, but a new and emergent life; an unexpected life where I can ‘pay it forward’ and return the amazing gifts of CARE I received from the people all around me. They include:  My entire family (Ellen, Michael and Adam), my parents, a friend who injured his back the same time I did, two physical therapists, one hydro (water) therapist, an amazing pair of yoga/meditation instructors, one Myo Fascia therapist, three doctors who wouldn’t give up on me, and a group of elderly men who have been cheering me on in my efforts to rehabilitate daily.

How will I pay it forward you ask:  Simply.  I am going to use my social technology investing, corporate director and advisory skills to help boards and their leaders realize their full potential by more fully connecting and empowering their constituencies.

To begin, I left the company I started (a large social enterprise software company) to work on and with Boards of Directors that wanted to build social networks of customers and employees, partners and investors to create new products and services that create a better world.  In healthcare, I believe we can use social technologies and open innovation to develop new therapies, prevention networks, and congressional changes based on the power of the network.   For example, I joined the US Against Alzheimer’s Network’s board, because its founders and board members believed that they could stop Alzheimer’s by 2020 by embracing today’s technologies to change the playing field.  Together, US Against Alzheimer’s Network is building a network of people, including researchers, caregivers, and Congressional Leaders, who want to make a difference in a dreaded and personal disease.

Now I don’t have Alzheimer’s, but I surely know what it is like to lose a loved one (my father-in-law, pictured), to be isolated and in pain, and to have to assemble a care group on one’s own, just to make it through the day.  I believe that lonely journeys can be averted.  All we have to do is care, use the power of today’s social networking software and create a movement to challenge the status quo. You can join the US Against Alzheimer’s Network and make a difference.  I hope you will.  I know that, together, we can ‘pay it forward’ to the generations that will follow us.  It is our opportunity.  Let’s not waste it.  Let’s build a Network of US that stops Alzheimer’s by 2020.

Are companies the same way? Nowadays, the new power word is “innovation”. If a company can become innovative, the idea is that the company will race past the competition to become the market leader. To show a commitment to this new paradigm, many companies have changed the “Chief Technical Officer” title to “Chief Innovation Officer”. This title change might be a quick way to cover a tagged blemish spotted yesterday. However, like the man, the company is still comforted and coddled by seeing itself the same way in the mirror every day with only superficial changes actually tolerated.

In my job search, I’ve noticed a simple way to see how innovative a company really is. Read their job postings! Most job postings still ask for job experience that is so specific, you can picture the HR department looking into the previous person’s mirror to figure out what to ask for from prospective employees. It’s a sure way to stifle innovation, yet it is being done by companies who consider themselves innovative.

I suggest that Chief Innovation Officers sign off on new job posting descriptions at their companies, if they want to encourage innovation from the ground up. Decide what specific information in the job posting can be replaced by some in-house training. Place more emphasis on finding creative, innovative and passionate people. Look in the mirror and be comfortable seeing a completely different person looking back at you. It is the only way that companies in today’s fast paced environment can keep from growing older and feebler as time goes on. Who’s the company in the mirror?

Posted by my Friend, Doug Malech  <dmalech123@gmail.com>

These new technologies have created new risks that corporate directors must understand if they intend to insure the future viability of their organizations.

With more than 1 billion customers using social media; with 2 billion employees, investors and partners carrying mobile devices; and with cloud technologies making headway in all enterprises, these technologies are about real business risks and opportunities.

In short, together, these technologies enable your customers to share their views of your organization’s products and services; your employees to comment on your culture and leadership; and your investors to communicate about your top and bottom line results.

Now I know that most corporate directors, institutional investors and CEOs do not fully appreciate these new technologies and their impact on every business process – including sales, marketing, hiring, training, investor relations and product development.  Further, most boards would prefer if these new technologies were just for their children’s use (Facebook, Twitter, iCloud, iPhones and IPads).  But they are not.  Given this reality, here are three recommendations to insure your success:

Having spent the last decade building and investing in social media, open innovation and mobile companies that now manage 15,000 social networks for 350 leading brands, I can fully appreciate how Apple became the most valuable company in the world – by understanding the need of its customers, partners and employees to connect, collaborate and conduct commerce using these technologies.

The time has come for all organizations, and their corporate directors, to understand the power of their customers, employees, partners and investors and their ability to network using social, mobile and cloud technologies.  In doing so, organizations will create unprecedented risks and rewards.  If Shakespeare was alive today and an advisor to corporate boards, his advice would be:   ‘To be or not to be, that is NOT the question? Whether ‘tis nobler (and therefore more valuable) to enable your customers and employees to network with each other and you, and by so doing, end a sea of troubles rather than by opposing them…that is the question!

The future of your organization’s customer loyalty, employee engagement, partner participation and investor commitment is dependent on the size, vitality and engagement of your networks’ engagement.   ‘To network or not to network’ is your choice and responsibility as a corporate director and member of the board.  Embrace these new technologies to insure that your enterprise achieves its full potential.

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Facebook, Twitter, and LinkedIn are just a few of the social networks that they can use to interact and share information regarding your organization and its products and services. But there are many more – including Glassdoor.com and the Vault.com. As such, organizations of all types must build their own social networks that connect THEIR customers, employees, partners and investors to give them outlets to share what they like and don’t like with each other and your leaders.

Its time to join the social revolution and become a social enterprise that embraces open communications, collaboration and connections using today’s mobile, social and clouding computing technologies.

Enjoy the journey – knowing what matters to the people you serve and who serve you is better than the alternative!

Barry

The highly publicized outrage of Egyptian Citizens and the ultimate fall of its long standing Egyptian President has been and will remain, in my belief, the defining moment in the open and social revolution that is now underway. But more important, it will define the future of corporate leadership and governance in the US for all organizations – whether private or public, even if leaders don’t know it yet in our capitalistic and democratic society.

Now I know you think I may be overstating the facts. But let me lay the foundation for what I believe is an upcoming upheaval in leadership and governance in Corporate America:

• First, In the past decade, we have seen the steady increase in the balance of power between customers and employees and their company’s leaders and directors which is putting significant strain on traditional governance systems – be it public (citizen led outcries) or private (customer and employee dissatisfaction). 
• Second, as social media continues to spread across the world (Facebook and Twitter now reach nearly 10% of the global population or 600M people), we are likely to see increased tensions among citizens and their leaders and that contagion will not be contained just to just the Middle East. Mark my words — it will spill over to America where our citizens feelings of anger will continue to rise. There is no stopping the ‘social revolution’ that is happening in Madison Wisconsin and in time, ‘we the people’ will let our government know how unhappy we are. 
• Third, for business leaders and corporate directors, the most important outcome of the Egyptian crisis will be the challenge to Corporate Governance and leadership itself – not just to government. The reason is simple. That challenge to companies and their leaders did not just arise in the wake of the Great Recession that just occurred. Rather, it happened over many years and began to manifest itself a decade ago when corporate trust in companies hit all time lows as a direct result of rising income inequality, high unemployment, spiraling budget deficits, and a host of other issues. Social Media (Facebook and Twitter) is simply enabling customers and employees to express their discontent, the same way citizens did in Cairo, Egypt and are doing in Madison, Wisconsin.

As such, if you want your organization to prosper in today’s socially networked world, its time to understand what really happened in Egypt and how that is beginning to play out in the corridors (employees) and shopping malls (customers) of America. Remember, much of what went awry in Egypt started many years ago and was the direct result of bad governance, poor decision-making, and traditional, top-down leadership models. And the same can be said about many of our own most ‘esteemed’ companies and their leaders n the US (e.g. Greed and lack of awareness).

It’s time for corporate leaders and their directors to truly understand the power of customer- and employee- led conversations empowered by social media and how those conversations will change what businesses do, how they do it, and how they will be led and governed. The bottom line: nothing less than a shift from traditional, closed governance to open social leadership is required. Further, this shift is not just about thinking about how to authentically engage with your customers and employees using social media —although that’s a part of it. Rather, It’s about rewiring the fundamental ways companies are governed, managed, and led. It’s also about changing how we view businesses and the way they create and measure value.

Social media changed the face of Egypt forever. It will do the same to Corporate America. It’s only a matter of time. So take hear if you are a leader in America. What happened in Egypt is going to happen here and it will impact all organizations. It’s only a matter of time. Whether you are leader of a government or a company, open a dialogue will your customers and employees and engage your constituents in social and personal interactions. WE can’t afford to kill the golden geese (Democracy and Capitalism) that has made America GREAT!

On Average, Americans spend nearly 50 hours a week working — among the highest number in the world. But if you are on a fast track, or working to keep your job, build your business, or embrace today’s social and mobile technologies (e.g. posting on Facebook or Twitter), you can spend nearly twice that amount a week working. I know: I did it for nearly 30 years.

Equally importantly, many of us take our work ‘home with us’ in today’s connected world. As result, all those working hours can make or break the quality of our personal lives – including our families and ourselves. Again, I know, because that effort broke me: I had 3 epidurals and 2 major back surgeries in 2010 and was confined to my bed for many months. What does that mean to you: simply work can, and often does, define the quality of our lives – both with our-selves (heartache and physical and mental breakdowns) and with others (unhappy relationships with loved ones including our spouses, children, parents, friends and neighbors).

In the article “The Sociopath in the Office Next Door,” it was pointed out that many of us have had to (and continue to) deal with leaders who are either shut down emotionally or simply mean and self-centered. Despite their talents in building a business, these individuals can make our work lives hell as they pursue their desire for ‘more’. Based on my last 30 years, plus my recent brush with a life-altering disability, I can now clearly state with clarity and conviction: kindness matters – especially at work given how much time we spend there and how it is increasingly infiltrating our personal realm.

Why does kindness matter: Simply:

• WE are all of the same kind – the humankind 
• WE live and operate in a ‘flat’ and connected world and 
• WE value people who treat us well and care.

Lucky for us all, the social revolution is well underway. It is connecting us to each other and allowing us to share our suffering and express it out-loud. It is allowing us to realize that we are all of the same kind – the HUMANKIND! And as a member of the HUMANKIND, we care about not being hurt, achieving self-mastery, and belonging one to another (e.g. that is why Facebook has grown virally to be a community of 600 million members). In short, we want to connect – with our friends, family, other customers, employees AND EVEN OUR HEART – yes that is correct, our heart.

Its time for businesses and governments, and their leaders, to realize that the old saying that ‘Don’t take it personally, it’s just business’ is no longer (and never was) true. Business and government is social and personal!. That is the bottom line. Given that, its time for all of us to embrace our KINDNESS, because being Kind matters in a social and connected world. Even (if not especially) at Work!