Social IT outbursts

More action, less talk.

2010-02-26T06:04:00.000-08:00

Image by doryexmachina via Flickr

I've been disengaged from socialized networks somewhat and deep diving into some new developments in .NET code recently like WebFormsMVP, IoC, and an OODB(db4o). So much to keep up on. Also I'm applying the ITIL strategy info from my recent blogs to a real case study of service management. It's important to me to do first, and talk later. But being a teacher, I'm paid to talk and it's a luxury to be able to work out the theory into reality. More soon.

Focus on the customer to optimize sales. Learn their value.

2010-02-15T07:21:00.000-08:00

The way to see value is in the customers’ eyes. Value is not the sum total of the technology parts you assemble with the profit you need. If the customer demands it, the price can rise as long as the supply stays constant. This is a basic economic fact. The customer demands better social networks because they see value in it. When you start using the customer as the vantage point you start understanding value. The objective is to increase value in the customers’ minds. Then your sales increase.

This is the last in a series of five posts which has covered value through the help and guidance of Information Technology Infrastructure Library. Past posts included:

Listening to customers

It takes effort to keep listening to the customer and not just be the prisoner of your own process. Shift happens. Businesses have to stay nimble and look for the next big thing and be prepared to drop the thing that isn’t doing the least good to retask those assets. The business, which could be you if you have a blog, tweet, or keep up a web site, must know when things like the floppy drive have run their course and people need something new. Steve Jobs was listening as he transformed the interface of the desktop computer.

People will lie to you about what they want as the last post talked about. We lie to ourselves just as easily when we’re the customer. Customers talk up the features that they want and then realize that it was a benefit they really needed after they have it put in front of them. It’s because we think in concrete units easier than in abstract needs. Perhaps the most famous quote on this subject was Henry Ford who supposedly said:

If I’d asked my customers what they wanted, they’d have said a faster horse.

Lazy manufacturers

Let’s update a saying that Peter Drucker, one of my favorite business writers, has used. He said that there are no irrational customers, only lazy manufacturers. Drucker was the force that helped turn the focus on the customer wherein the power of success laid. That customer now has recently been empowered with the internet and took over the wheel causing the shift from sales as we knew it to Sales 2.0, or sales that doesn’t work the old way. The customer has to be assumed to be rational but as Drucker knows, the perceived reality is usually quite different from that of the manufacturer’s reality.

The new saying should be that there are no stupid customers, only lazy service providers. That goes for Google, Microsoft, Oracle, Apple, Twitter, Facebook, and anyone else who lets the customer slide enough to where they have to find another product or service that really meets their need. The laziness is in not keeping an open ear to the customers’ needs.

Growth can slow efficiency

You may be listening to the customer and then charging off into the distance where the customer may follow or may not. They are the leader here and not you. If you start ramping up a bigger and better product, you may be in for some rough times ahead. The not so stunning introduction of the iPad is one of those make-it-bigger thoughts that equates to making it better in executives’ minds. A bigger iPhone is just a more unusable iPhone. The iPad is just a newer type of computing device that lies somewhere between the smartphone and the netbook. Most likely, there won’t be a separate market develop for it but it may cause the netbook market to go towards touchpads faster. Prove me wrong, Apple.

Size increases can provide the brakes on the efficiency of a firm as well as a product/service. Ben W. Heineman, Jr., former general counsel of General Electric, complained that being big is not the solution to superior legal service, quality or price. In the end, Heineman “came to believe generally that small was beautiful, and big was wasteful.” The problem he was grappling with was one of outsourcing and therefore loss of control for global in-house law departments. He preferred the small specialty group in-house over the global legal powerhouses. The extremely large law services didn’t see the need of the customer to be in control and how much better small groups served the corporation.

So what happened to the economic principle of scalability? It works to a point which is more of an issue of the industry rather than a universal principle of growth. The service manager has to be aware of when size gets in the way and step back into guerrilla tactics instead of keeping up the full assault.

Value comes from turning towards the customer and giving them both what they need and a promise of stability. Value is more than a good product at a low cost. And throughout the quest for more value, you will never achieve the goal because it’s a journey that will keep your ear open to the customer who really makes your business or service work.

Image by Magnus3D via Flickr

How to not lose value across the great marketing divide. Be the customer.

2010-02-12T06:19:00.000-08:00

Marketers, are you writing an informative blog for your social savvy readers? Wrong. Are you gaining followers on Twitter to help your sales efforts? Wrong again. In business, information technology (IT) people and those associated with IT often fall into that same trap of thinking that the application they run turns out value that their customer wants.

Heck, even marketing guys think “I’m using Twitter, and people want me to tweet.” Or I’m running a web site and people want me to put more stuff on my web site. Start running your business and stop micro-managing the processes. I was raised on a Kansas farm and we don't make friends with the cows. We have to get them to market and make a living.

This management malfeasance can scale up to the position of CIO of a large corporation where the thinking goes that because they provide an infrastructure for cloud computing, that they are doing a great job keeping up with technology. What if the CEO thinks you are off your rocker because you spent your entire budget wiring up boxes with flashing lights that don’t get him any more sales? He’s your customer and he’s right. When you start thinking or being the customer, you'll get it right.

This is the fourth of five posts covering economic value through the help and guidance of Information Technology Infrastructure Library. Past posts included:

The last post in this value series to be published will be

The view from your customers optimizes sales. Learn the value.

The divide

There’s a great divide between what a customer says that want and what will make them happy. No person really knows what will make them happy until they experience it. A web site designer who listens to their client when they say that they want a site just like Google will go through months of development trying to capture and index millions of pieces of data in order to please the client. But the client isn’t happy because the user interface isn’t as simple as the Google interface and they don’t care about the entire world of web data. The client described a feature but they really wanted the benefit of a simple to use web page helping them leave work earlier.

One way to get around the client’s spoken request for a feature and get to the real benefit they seek is to do some sort of root cause analysis. One of the best ways to do that is something that is ironically amusing due to recent news reports of Toyota’s devastating recalls on faulty systems including brakes or accelerators on almost all their cars. Toyota introduced the Five Whys to get to a more basic understanding of optimization on the manufacturing floor. If you keep asking why long enough, you get down to a very basic cause and five whys seemed like a good number. I suppose the failure in the massive Toyota recalls this last week is either in the failure to do the questioning or in the follow-through to learn and apply a remedy. Someone was hiding their head in the sand. Time for some retroactive whys.

Features vs. benefits

You’ve heard that people buy the sizzle and not the steak. They want a ¼” hole and not a fancy power drill. They want the benefits and not the features. But our computer infested world has nothing but features written all over it. It’s no wonder that when we try to sum up what a web site is about we start listing the JavaScript features and the impressive graphics used in the background. Go figure out why Craigslist is as popular as eBay and you’ll see where benefits trump features. Automobile buyers think about extra options. But the best sales people push benefits.

Making people happy is all about economics and the academic definition of value. It’s not the product, it’s what the product does for them. And for many business students who leave their economics behind, that’s as far as we get before they start to tally up the dollar signs and head down the ROI road into the mean profit-hungry corporate monster that met with major resistance as those fellows started suffering financial heart attacks. Just like a diet rich in fatty foods, it tastes just as good when you start as it does right before that heart attack, so you generally don’t notice if you don’t want to guarantee a healthy life beyond the next few minutes. Corporations stuck on profit put blinders on that caused them to miss industry shifts and either have to play catch up or fail entirely. Those students should have paid more attention to their dismal professors of economics.

More than price

Are you still telling people about the great quality, service and reliability that your product or service has? Stop. These are just the attributes of your service. Customers want to know how it plays out in the end for them. You don’t make a sale on the bullet points of the box. You make the sale on an emotional tie to a future benefit.

Does the guy get the girl and I become a millionaire? Or do they just "need" a 2.5TB Gigabit Ethernet 10/100/1000 RAID 5 drive? There’s a good reason simple marketers show geeks using HappyBits software with girls hanging off their arms. Does the product/service manage your customer base so well that people are delighted with your customer service? Or it is just a piece of .NET software using the latest REST web architecture? Show those happy smiling customers flocking around a new data server and you got a sale.

Tell the customer what the benefits are and make it real to them. Their reality isn’t based on a list of summarized facts. Customers have to understand it in their terms which is the way they see it in their future. “Picture yourself on a white sand beach, exotic cold drink with an umbrella in it beside you because you chose our network storage solution...”

If you asked an average customer about how they’ve been talked to about quality they’d say that everyone talks up quality. But see what they buy and it’s rarely based on the sales trinity of price, quality, and delivery speed. It’s based on the value that they perceive through their expectations of what it can do for them.

Economists, real economists who look past the price, call this level of expected happiness their reference value and it can be vague or not. It can be based on the first contact where you tell them about the product, the continued dialog with the customer, or prior experience with other providers of the same service. Prospect theory in economics covers this in more abstruse detail but it’s based more on common sense than charts and graphs.

The marketing mindset

Increasing value begins with the questions from the customers’ perspectives. ITIL talks about a marketing mindset which means to just be sympathetic to your customer. It starts by asking the following questions:

What is our business?
Who is our customer?
What does the customer value?
Who depends on our services?
How do they use our services?
Why are they valuable to them?

I’d rather frame that in the customers’ minds and ask the questions as if you were the customer.

What kind of products do they carry now and might carry later?
Do I feel comfortable buying from them?
Do I think I could use their product?
Could I do without their product?
Where can I use these products?
What do I say to my wife that makes sense about why I bought this?

Let’s put these questions in a different light. Say you are a social blogger. Now how do you find out if you have value? Try these questions about your blog service:

What is my area of expertise?
What area of knowledge should I be learning?
What person would I want to read this stuff?
Why would the reader finish reading my blog?
Why would the reader come back to read my next blog?
In what kinds of activities would my reader remember my blog?
What parts would they comment on, retweet, or tell someone else about?

You aren't really writing a blog, you're providing solutions to readers' problems. You aren't really gaining Twitter followers, you're building trust for your brand. As soon as you become a fixture in the mind of your customer, you will start to get results from those customers. The value that you find there will eventually be built into your product if you are paying attention. That value will then translate to a better service, a better mousetrap, or a better blog.

Image by Matt & Becky via Flickr

Promise me value or your sale is toast. Warranty in value.

2010-02-10T07:13:00.000-08:00

Don’t interrupt me. I’m having fun on Facebook. I’m getting value. You take that away from me and I lose the value. Don’t you hate for the lights to go out, the timer to expire, or Twitter to fail? You want your pizza delivered hot and fast. You want your television program not to lose the sound halfway through and the color to be stable. If you opened a business account with a credit card, you don’t want someone else buying stuff with it. This necessary component of value to a customer is the believable promise of a good time.

As a business manager of your services, your goal is to take what you got and make money with it. If you are a non-profit, you want to provide value to a member or citizen. Maybe it’s a writing talent that you want to be paid for, maybe it’s a glow in the dark t-shirt that you found a market for, or it’s the next viral YouTube video. But it’s up to you to decide the right mix of quality, cost and risk to pass on to the customer. They of course, want it all. A thicker fabric, lower cost, and no shrinkage at all is what they ask for. You manage your business the best way you can to own that market.

This is the third in a series of posts covering what goes in to making value through the help and guidance of Information Technology Infrastructure Library. In the next posts you’ll see:

How to not lose value across the great marketing divide. Be the customer.
The view from customers produces better sales. Learn their value.

Past posts include:

Economics doesn’t avoid promises

Economics has a bad reputation because of that thing called price. We take ownership for handing over a check for the price and the service provider thinks that they’ve sealed the relationship. That’s the way economics is to most people.

But economics has never been about money. It’s always been about value and scarcity. The value of a transaction is more than a decision to buy a service concluding with monetary exchange. People don’t make bottom line decisions or else no one would ever visit a Saks, Barney’s or a Holt Refrew.

We’re looking for those things that help make a decision when other things like functions are about the same. Sure, the product costs a discrete amount. But how much is the service provider going to talk to me after I walk away? How long will the product last before it starts to crack, run out of ink, slow down, or become unusable?

The promise of Zappos for returning shoes without questioning where the customer has worn them or for how long has propelled that web store past any other commerce commodity store. These are shoes just like any other ones you get in a store. But they promise so much and make you happy at the same time, all of which adds up to profit and loyal customers.

Promise dissonance

Customers get skittish when they don’t know that their service will be consistent. They become skeptical about the uncertain value they are getting. They start wondering about outages or worse, you going out of business. It has to be backed up by a promise that the food will be delivered on time or that phone service will be restored in the hour. They will illogically switch to a competitor even after you increased the perceived value by giving them extra time, extra goods, or extra quality. That’s because customers worry more about losses than getting stuff that they didn’t initially sign up for.

The expectations of a customer can be kept from fading away by having some documentation about what the customer is getting. A food label that says what is in the box is better than a brown box. A picture is even better. But start showing your hamburger as juicy with a thick tomato and fluffy lettuce leaves and then serve up a flat burger with a flimsy couple of unappetizing vegetables and see how many customers come back.

What if you want to add utility like I mentioned in a previous post by adding resources to provide a wide menu and don’t have the assets? Then you take away that uncertainty of variation in the services. You make your promise better. Just one soup delivered consistently hot and yummy will turn a business into a magnet like Andersen’s pea soup restaurant along that vast stretch of agrarian flatness between LA and San Francisco. Nobody remembers exactly what town they are in but they remember to stop for the pea soup when they see the sign as they have for the past 75 years.

Just breaking the uncertainty of delivering your product can make a customer engage in your service. They will of course, make a mental note of everything you do from the first meeting to the box you deliver your product in. Your telephone etiquette and return policies have to be in line as well as being up front with any charges that they might incur along the way. Without a strong corporate wide policy that spells out the utility and warranty of the service you provide, you are setting yourself up for a portion of customer dissatisfaction.

If you blog you might think of these things to help you break that uncertainty:

keep a regular schedule
keep to a consistent set of topics
use graphics that match up with your posts
use backgrounds that don’t hinder first impressions
make all the widgets useful for your topic

Put the promise of how you deliver the product up there with the product that you have figured out suits your customer. Don’t let the sale of one or two of your products soothe you into believing that it’s all going to sell well. It’s more than money when it comes to value for the customer. Promise them a good time and follow through on it to keep that sale or keep them reading.

Image by Getty Images via Daylife

Related articles

SaaS Frontier: The Difference Between “Quality of Service” and “Quality of Experience”

Maximize value for your customers or they’ll leave. How to sell more.

2010-02-08T09:43:00.000-08:00

If you write a blog, the reader expects your social information service to be something they want to read. Many readers will pick up anything and discard it with the same randomness of inattentiveness as a channel surfer.

But there are those people who do have more of a need for related knowledge and are Googling about a certain topic like sales or marketing. They will distinguish the value of one post over another based on the relevance to them.

If you are reading this blog, then you are a customer of this information service. If you still watch television, you are a customer of the entertainment industry. And for many, the entertainment value of just having the television on to anything is sufficient. It could have been According to Jim, Knight Rider, or Cavemen and it would hold your attention for as long as Billy Mays could.

This is the second in a series of posts covering what goes in to making value through the help and guidance of Information Technology Infrastructure Library. In the future posts you’ll see:

Promise me value or your sale is toast. Warranty in value.
How to not lose value across the great marketing divide. Be the customer.
The view from customers produces better sales. Learn their value.

The last post was :

Sell me quick with your value. Wait, what’s value?

Utility sufficiency

A television program only has to fill up the air waves to become sufficient to cover the functional part of the service definition. We’re not talking about how good the utility is of the service. It’s just gets us in the ballpark. The more functional and useful it becomes to us with a narrower and narrower expected flow of topical information or entertainment level, the better the utility.

A station that broadcasts about “The Life of a Plant” and then does nothing except show you a plant growing 24 hours a day is constraining its content to the bare minimum. You can’t argue that it’s not a television program. In the 1960s, Andy Warhol pushed the boundaries of sufficient utility in some of his reality films like “Empire” where he filmed the slow-motion shadows of the Empire State Building for over eight hours. Another incredibly boring and innovative film event was “Sleep” which showed a friend doing for eight hours what most of the viewers wished they could do and some probably did.

Other people in the minimalist movement of art pushed boundaries whenever they could to see where it broke. You saw white canvases, black squares, and even raw materials. Music gave us anti-art pieces from the 1950s on like John Cage’s 4’33” which consisted of absolutely no notes played on a piano. Remember that people still paid to go watch the event which shows that there is some value to it.

Utility constraints

As an information service or product becomes more focused on the customer, the more the customer is going to increase their perception of value. Just having lots of tweets to sort through doesn’t really help a person that wants to know what’s going on around them. To that person, seeing a huge pile of unorganized tweets constrains them because they now have to spend more time finding what they want.

Twitter was not providing enough value and other GUIs like TweetDeck and Seesmic came to rescue the overload of conversations. One of the best ideas they had which Twitter now uses is the tweet list, a device that helped provide more value to each customer by collecting folks to follow, without officially following them, in groups.

And now you can localize tweets by your IP and in mobile phones. As you start to eliminate constraints to your geo-sensitive customer, they find what matters close to them and your value increases. That’s why we will be seeing more and more geo-tagging of tweets on cell phones. Business services want to know where you are so they can talk to you at the right moment.

In television, value is added by increasing the viewing angles so everyone can see the LCD set with the same brightness removing a constraint. Radio plays to a constraint of enjoyment of music because advertisements annoy their customers. By packing songs in a long set, the total enjoyment is more than if they were broken up by ads every couple of minutes.

By decreasing the constraints, you achieve a quality product in the eyes of your customer. Darren Rowse often talks about blogging on his ProBlogger site. He recently enjoyed a great meal from which he found value and learned some blogging lessons. He found that his experience was in no way constrained to the dining room and extended to his house that night and the next day. The menu didn’t overwhelm the diners and interrupt the meal’s conversation. The restaurant walls didn’t stop outdoor aromas from being enjoyed inside.

Even Andy was probably interested in communicating that a film experience is more than what is constrained on the screen in the transition of light over the Empire State Building rather than showing a minimalist film because by the time you are cooped up with about 20 other people who paid good money to be bored to tears, you start yelling at the screen. That’s when the fun begins. The entertainment then leaves the screen and you and your fellow naïve underground film aesthetes start entertaining each other. John Cage’s 4’33” also attributed value to what was happening in a performance other than the piano sounds.

Utility consistency

I don’t like to take guests to a meal that I have bragged about having the best soup choices in the city and then go to find out that they only having variations on chicken noodle today. The chicken vegetable noodle may be the best in the city but you’ve declined in service performance from the expectations of the customer and thus, you’re not the soup king in the customer’s mind anymore. That variation is what causes customers to lose value and to seek another restaurant. They want a certainty that each time they get a meal, it will be delivered with as much satisfaction as the one before.

It’s important that if you tweet or blog, that the missives whether long or short are consistent. The subjects should be related. The numbers should be constant over a period of time. And the type of tweet should be the same. I like to create lists of people who are consistent and call them no-noise lists on Twitter. That means the tweets are on topic and few personal tweets confuse the flow. Here are some of my pet peeves for what gets a person knocked off of one of my no-noise lists:

topical tweets and then talk about where I’m flying next
good retweets and then some out in left field comment
no tweets for days and then 10 tweets in a row
tweeting a contest entry more than three times
news reporting on topic and then telling me about sleeping and waking up

Utility assets

The customer gains value when you add extra assets to a service. This increases the utility or functionality of the service and it shows up in the varied choices on your menu of products or services (the service catalog in ITIL). Performance increases by adding technology choices or assets to the product but customers don’t like it when the next product off the line has fewer assets even if they didn’t use them in the last product. Microsoft Excel doesn’t remove the macro even though the majority of the users don’t use it. They will detect a loss of value if it disappears. Remember to be consistent.

Increasing the number of choices in the soup line will increase the utility of the restaurant but will it make the customer happier? Actually yes, in general, because it raises the performance average. If one soup displeases you like the orange yucca delight, there are several other ones to keep up the perception of value. There’s a better probability that the variations on your services will please more customers. If you have the resources, you can offer soup to nuts and get more people’s expectations satisfied.

Expand your menu based on the assets you currently have. If you sell a basic product or service, you can make allegiances with other vendors to get access to other assets. You’ve seen the Ford/Eddie Bauer collaborations and foods co-branded between two manufacturers. Your expansion could be based on an addition of a web site that you’ve had all along that sells small applications that propels your little cell phone and your company into staggering profits like Apple’s iPhone.

So, you want to maximize your value before your customers leave to find it elsewhere. To do that, here are the four parts of utility that help you increase your total value again:

make sure you have the right stuff
eliminate what customers see as a restriction
keep your product/service constant
mix up as many variations as you can to sell

Get all those parts working for you and your product will be targeted right down Value Lane towards Customer Satisfaction Court.

Image via Wikipedia

How to Measure ITIL Service Utility and Warranty
by Hank Marquis
B2B IT And Your Value Proposition
by Elliot Ross

Sell me quick with your value. Wait, what’s value?

2010-02-05T11:52:00.000-08:00

Bing Crosby via last.fm

Maybe you don’t think you make a sales pitch. But if you are a blogger, your post's title is a sales pitch. If you tweet, your Twitter page is a sales pitch to follow you. Your Facebook or LinkedIn page sells to your friends and followers. If you merely work for a business and mention their name, you are a part of an image that you become a part of when the customer is ready to buy.

Can you sum up what you do in a few words? Do you know what you offer that is of value to your customers/readers? Do you know what your value is and how your customer/reader sees it? Do you understand what kind of sales pitch you are making to your customer/reader?

You need a pithy summary more than your customer needs it. That’s because the customer will buy your sales pitch only once and then see the reality of it. If you’ve made the wrong summary, the customer won’t trust you anymore. You want them to need it more than once and to do that you need a clear and accurate focus for your service or product.

This series of posts will cover what goes in to making value through the help and guidance of Information Technology Infrastructure Library (ITIL). In the future posts you’ll see:

Maximize value for your customers or they’ll leave. How to sell more.
Promise me value or your sale is toast. Warranty in value.
How to not lose value across the great marketing divide. Be the customer.
The view from customers produces better sales. Learn their value.

Service composition

The type of product or service that you are selling, writing, promoting, or creating can be words, music, speech, action, or manufactured. It’s all in how the customer perceives what you have. Your service (my favorite word for any of the fruits of your labor) is a combination of many things that the customer wants and sees.

I typically riff off the Information Technology Infrastructure Library definitions of a service during my certification classes where the formal ITIL definition of a service is split into utility and warranty. Most people haven’t a clue what that is and dutifully memorize the definitions for the test.

Utility is the British word for what we would prefer to call the functionality of the service. Warranty is the word for what we might propose the non-functional parts of the requirements to cover but doesn’t include everything there. Because people listen to these kinds of definitions and then go right back to charging what they think they are worth is why I wanted to write about value.

I don’t know how many times I’ve had discussions with artists who talk about their skills and talents but turn out ghastly art. They put themselves in the position of the customer who conveniently loves their artwork. They then feel that it’s worth thousands of dollars or at least an hourly wage because they should get paid for their time on the canvas. Most of the time it’s worth fifty bucks at the most which would cover their meals while painting that mess. And studying utility and warranty definitions wouldn’t help. But understanding value would.

Customers choose positives

The customer is the final word in what makes up the value that you cobble together. If you are writing about the endangered life of a Physiculus, you’d better make sure that the customers you have or can get really care about that. The more they care about the product or service you have, the more they put a positive difference on the value of your goods or services and choose them over another competitor.
To make the most out of your positives, are you paying attention to what you can improve? If you are writing the best blog possible, are you

on a dependable schedule, say once or twice a week?
using the best SEO techniques for title and content?
crafting the sharpest titles?
working the StumbleUpon angle the best you can? etc.

That’s being efficient. You are effectively taking care of the outcome that that customer wants. But the real question is whether you are fulfilling their needs. Being efficient doesn’t equate to customer satisfaction. You have to have a match with the customer between your service utility and their perceived value. I enjoy reading serial entrepreneur and teacher Steve Blank’s blog that talks about Customer Development which is really matching up your product with the customer instead of matching up a customer with your product. He knows why the customer chooses value and has implemented a huge portion of the value formula in the right way.

Value is not just you producing a product at a low cost or best quality. You could have the most cost-efficient, most functional, best looking ice cream glove in the whole world and still not raise an eyebrow. I like Eric Ries’ comments last year on the difference between Ali G’s ice cream glove hoax and a Snuggie where he concludes that

the biggest source of waste in product development is building something that nobody wants.

IT people and organizations think they provide a great product but many times, business can’t figure out what to do with it to support the business. Maybe you’ve tried to introduce social media into your business. If you didn’t find out what the business goals were before and came on with a sales pitch based on the coolness factor of Sales 2.0 and cutting edge acronyms, you might have ended up not satisfying the needs of your customers.

Profits come not having negatives

What we’re dealing with here is basic economics. That’s the stuff that rarely gets out of the classroom and discussed in the board room. Sometimes governments hire an economist so they can take the flak for the economy. But one of the fathers of economics, David Ricardo (he was English, born in 1772 and never on I Love Lucy) is believed to have said that

profits are not made by differential cleverness, but by differential stupidity.

So if you blow it and turn out poor quality or include hidden costs, then you will start seeing the flip side of the value coin which takes away value from the customer’s eyes and becomes a negative difference between you and your competitor. The end result is that your Physiculus piece is ignored for some other fascinating treatise on a fish endemic to Saint Helena.

The negative value difference causes managers to be very averse to negative press reports and recalls like Toyota has had recently. In a competitive environment, the slightest edge of benefit through slinging mud at a industry peer is worth it. Politicians manage to get equal footing in a race on the issues because they listen to the voters. But even though they talk about how sad it is to have to degrade the reputation of another fellow candidate, they will still throw some mudballs because it’s a strategy that works.

So like Bing Crosby sings in the song:

You've got to accentuate the positive
Eliminate the negative
Latch on to the affirmative
Don't mess with Mister In-Between

You've got to spread joy up to the maximum
Bring gloom down to the minimum
Have faith or pandemonium
Liable to walk upon the scene

Bing Crosby via last.fm

Ignoring the big picture leads to bad weather and social media problems

2010-01-22T06:29:00.000-08:00

Could you be a good marketing manager if you were told that you have to use outdated Instant Messaging applications (IM, remember?) instead of Twitter? Oh, and people don't really read them much anymore and there might be instructions but no one can find them.

How about if you were told that you have to manage a backwards division of several hundred people that all do the opposite of what you say and you have to learn to tell them exactly the wrong thing in order for them to do the right thing? That sounds like the world turned upside down.

People are using outdated processes that don’t work well. And we’re not talking just about social media. The way that people use social media today is outdated, ineffective, and sometimes completely backwards. The focus should be on a system approach rather than the piecemeal bulleted task approach of the “10 Things My Mother Told Me” style.

Ignoring systems causes problems

John Sterman, author of Business Dynamics, the jewel of system dynamics writing, thinks that leadership without a systems approach causes more problems than it solves. He notes that hard data backs up the idea that people don’t understand systems and people don’t naturally think about systems. People have to be taught how to think systems with models and how to ease in to doing it at first. And it also takes a person willing to be a disciplined thinker using data driven inquiries with a lot of human understanding and respect.
Perhaps, the most unnerving ideas Sterman pushes forth from the citadel of the MIT Sloan Business School are that

all decisions are based on models
all models are wrong and
we can’t ever figure things out completely

That forces us to be a humble participant in the marketplace rather than the gladiator of social media marketing. When we realize our inability to control everything, we become more effective in the business world.

Could it really be true that Cisco’s meltdown in 2001 which allowed them to write off $2.2 billion in inventory was caused by reduced capital spending and the global macroeconomic environment, as noted in their Annual Report? Or is it more likely that their policies were just a macro version of the Beer Distribution Game like the evidence shows?

Systems thinking doesn’t recognize side effects

Side effects are just things we didn’t think of that we should have and aren’t going to be responsible for. It’s easier to assign the blame to the drug, the employees, or the military action.

It became necessary to destroy the town to save it.

as a Viet Nam era major allegedly said but never took responsibility for. His policy was directing behavior that had mismatched values with the general public

Systems thinking requires us to be accountable and responsible for our policies that we set and not continue in the child’s ploy of shifting the blame to escape parental wrath. The side effects that we caused are really just feedback from our decision inputs into the system. You have to honestly and humbly ask yourself if you have the ability to control the environment in which you work. You usually do.

Human influence on natural systems

Then you should ask yourself how you can control the parts you think you can’t manage. Are you thinking you can’t get more than 100 Twitter followers or that no one wants to retweet you? How can you influence people when they don’t want to be influenced? You think about the system that they are a part of and in many people’s corporate vernacular the solution becomes “think outside of the box” because the box are the hard walls of details that we continually focus on.

Maybe in Mark Twain’s day when he said

Everybody talks about the weather, but nobody does anything about it.

there weren’t meteorological scientists who could shape weather but today we are talking about global warming and our coal burning policies are a main talking point in the debate. We recognize systems at work that we control and their effects on our world.

Certainly Mark Twain’s cousins couldn’t set off a display of the Northern Lights like the High Frequency Active Auroral Research Program (HAARP) can and upset every conspiracy theorist in the world at the same time. Even I’m concerned about the inadvertent feedback from an unknown device that can spew 3.6 megawatts of energy above my head into the environmental system that I’m living in. Hoover Dam produces about 5.6 megawatts per day which is almost what an average New Yorker uses in an entire year in case you need to talk apples and oranges.

More research into systems points to a seven day cycle of both pollutants on the East Coast and tropical cyclones. The supporting data comes from the number of cars on the road during the week which declines on the weekend and the higher chance of rain on the weekend with the least on Monday. You do the math and remember to work the weekend and take off Monday and Tuesday.

Getting others to change

Policy resistance to change is a major problem no matter where you encounter it. Maybe you're frustrated because your call to action fell flat. If it was a tweet that went unnoticed, then it’s because of the previous tweets that you look like. People say it’s just another marketing ploy, another quality program or another 10 ways that I can forget, and then ignore you.

People react to events and not to systems. The unscientific masses assign cause and effect to a volcano, a science experiment, or an alien intervention. My tweet was ignored because of the Haiti earthquake, people aren’t buying because the stock market went down, or the iPhone already has flooded the market. They react with a short-term conservative marketing program which doesn’t have real passion behind it and barely convinces anyone that they have something worth paying attention to. The market reacts with complacency which turns into no long-term effect. The short term goals produce low sales results (the feedback in the system) which causes cynicism about real change or better marketing programs. To get people out of the rut, the individual has to be taught to be a part of the larger social system.

Social networks can be seen in a good light (ignoring the electricity consumption for the computer hardware) for increasing the social interaction of individuals while decreasing the television viewing of the general public. Many studies have correlated television viewing with lower social interactions and all sorts of civic woes. If these are to be believed we can take solace that internet browsing is increasing at the expense of of television viewing and people are spending more time with their extended friends online instead of watching Friends reruns.

The more you spend time in social networks building up your extended friendships or trust agents, the more you come to value the ability to create change. People react to other people over the social networks. Television sets don’t react.

The Fifth Discipline

Peter Senge wrote The Fifth Discipline about 15 years ago on the need for a systems approach to business. Are you able to understand a watch by disassembling it into thousands of pieces and then, even harder, reassemble it to understand it as a whole? Are you able to assemble a broken mirror’s pieces and know what a real reflection looks like? Senge promoted the learning organization, a responsive business organization that can learn faster than its competitors. Instead of the top dog strategist learning for the rest of the blue collar workers, it’s got to be the entire organization learning at all levels.

Managing a better pizza

Nick’s Pizza and Pub (see “Lessons From a Blue Collar Millionaire”, Inc., February 2010), near Chicago, is a place where people are being educated by a different culture at all levels. They tell people what the situation (not the Jersey Shore type) is and let them choose how to handle it giving them control over their outputs. This increases the responsibility of the employees. I think Edward W. Deming would have found most of his 14 Points for Management in this business.

Managers at Nick’s are motivated to ask, learn, and dig down to the fifth why on their own to solve problems and not feel that sense of futility in a corporation that isn’t a learning organization. One young woman manager from the employee veteran ranks who started at 16 controlled costs better than three outside experienced professional general managers who talked the talk but couldn’t walk the walk. If you like Zappos, this is another great place to learn success from.

System theory

The previous posts in this series on systems theory as seen by the Information Technology Infrastructure Library (ITIL) explored the following topics:

How to distribute beer and manage social media to sell and market successfully. – the difference between event and system management
Feedback is critical to an improving sales or marketing process. – the role of feedback in a system
Structure dresses your social media for success – the role of structure in a system

Image by Getty Images via Daylife

Structure dresses your social media for success. Better than experience.

2010-01-20T05:53:00.000-08:00

Do you have structure? According to the Information Technology Infrastructure Library (ITIL),

Without structure, our service management knowledge is merely a collection of observations, practices and conflicting goals. (ITIL Service Strategy)

Structure keeps us from doing the same mistakes over and over if we learn to improve by incorporating feedback (previous post). ITIL describes a framework for managing business services which can be as personal as a blog or as large as an international corporation.

Structure determines behavior

I’m sure you act differently when you wear a suit instead of a t-shirt and jeans. In your sales or marketing position, you create an operating structure with a phone, a computer, and a contact list. Your behavior would be different if your structure was a car, a map, and a thousand samples of a product to sell. When we change the structure, we change the behavior and the resulting events that come from that.

Your experience you receive during those events is useless if you don’t have a structure to change because that experiential feedback can’t be incorporated into your learning to improve your job. So structure trumps experience as well. Who would you rather hire in a sales representative job

a green sales rep that mentored with a sales master for one year and understands the buying cycle completely but hasn’t struck out on his own
a 20 year rainmaker veteran who has been with the best companies in the city, has a good network of contacts, and says that he’s a natural and doesn’t need a new fangled way to do better-I’m-just-fine-the-way-I-am-thank-you

Your instincts should say that the sales veteran probably hasn’t learned much of what is right and hasn’t improved over his career. It’s likely that he’s a primadonna and will add conflict to your team. Natural talent can take you part of the way but the combination of natural talent and a structured approach to improvement will take you much further. It’s the structure of your day, your processes, and your job that makes you successful.

Structure is how you connect

Until you confront the way that you are really connected to your world, you won’t be able to make a significant change to how you perform. It’s the connections between all the pieces of the puzzle that make a difference and not the components themselves that matter. A systems approach in IT as well as business will look at all of the constituent parts of the organization in order to make an organizational transformation.

Marketing structure

Tom Webster of BrandSavant recently posted about Processing Qualitative Research Data With Tinderbox. The great thing about that Mac product is that it allows you to start with unstructured focus group data and develop a structure for interpreting it as you work with it. It's a solution for two hard problems at once - how to create a structure and how to work with qualitative data effectively.

The last post in this series on systems theory in business will look at the consequences of ignoring a systems approach.

Image by nima; via Flickr

Feedback is critical to an improving sales or marketing process. Ask questions.

2010-01-18T05:42:00.000-08:00

There are two basic ways to manage a sales process. One is to take the results from the output and change the process based on that. The other is to ignore the results and do the same process the same way. The feedback loop from using your own output as input for modifying your next process is a closed-loop control process. The other style is an open-loop control process where you don't let the results affect your next steps.

Open-loop vs. closed loop feedback

Open-loop processes change only when the inputs change. Maybe a customer has more money or less money. You still try to sell them the same product with the same approach. When things change too much, you don’t cope well. Maybe you know that smart guy, Al Einstein who said:

Insanity: doing the same thing over and over again and expecting different results

An open-loop process is more like a car braking system. The user has an intention whether good or bad to slow down the “driving system.” A foot steps on the brake, the car slows down, and the car doesn’t bother to do any feedback unless there is a closed-loop anti-lock braking system installed.

Closed-loop processes have a continual monitor like a thermostat that controls the heat in your house. It is based on a goal set by the user and then the process works without intervention. If you walk in the door after work every day in an open-loop system and turn up the heat, eventually it will be summer and your system isn’t working well.

Feedback questions for sales and marketing

The faster the feedback in your system the less performance swings there will be as your goal is kept in sight. You can use this concept by checking in with your clients at every stage you can where it seems appropriate. And having a set of expectations to guide your future tasks is even better. Each question that you ask has to be listened to and absorbed so you can use it in your future meetings.

Ask feedback questions like:

What has been the best benefit you have gotten so far?
How can I improve my service to you?
Is there anything I shouldn’t be doing?
Did I miss giving you something you wanted recently?
Did my company do something that I should be aware of?
Should I have spent more or less time for a particular task with you?
Am I doing the right thing for you right now?
What other ways would provide value for you that I can offer?
What would you like me to do more for you?

The list is not a complete list of questions but a start for keeping the conversation open and honest. It’s the trust that the client has with you that will provide them with an opportunity for you to improve your experience with them. The more you listen, the more you’ll get honest responses.

Feedback is not linear. It takes a good manager to recognize patterns in the feedback to initiate changes that keep the process on target. When you start receiving the feedback, it will be good to keep a log. That way you can search for patterns, keywords that keep popping up, or themes that should be addressed. Then you can plan an improvement plan to get those processes back on track.

The Information Technology Infrastructure Library (ITIL) talks quite a bit about how to manage your business by a systems approach using a closed-loop feedback system. It also talks quite a bit about how a sales or marketing professional can improve their performance even though those specific functions are not addressed.

Follow-up posts on the topic of system theory will look at structure and the consequences of not understanding systems.

Image via Wikipedia

How to distribute beer and manage the big picture in social media to sell and market successfully

2010-01-15T09:55:00.000-08:00

It’s just human to focus on managing by event. It is much harder to pull yourself up out of the muck of random events and manage better by thinking about the big picture. In the early 1960s, a bunch of MIT business school professors who I believe spent more time at a local pub than in the classroom, came up with a way to teach the failure of managing by events by using beer. Of course, it was a great success, even though everyone failed.

This beer distribution game was a simulation of a supply chain from retailer to warehouse to manufacturer. No actual beer is used (sigh). It’s a simple game with orders and back orders, inventory shortages and excesses, customer demand and production shortages. The players always get frustrated and disappointed because they manage by event. They blame, accuse, doubt and use unpleasant words as they pursue a level inventory and a happy customer. If you would like to play the online version of the beer game, get three other people with computers (and a few beverages) and start distributing.

God is great, beer is good, and people are crazy – Billy Currington

Event vs. systems management

As data systems analysis progressed from an event managed to a component managed and most recently to a systems managed approach, business systems are also undergoing a similar change. Business focused on the sales event, the ad event, the transaction event, or the shipping event. Then the components were tied together in more of a component approach where sales and marketing teamed up, ordering and shipping reduced warehouse time, and customer service and product development consulted with each other for better products.

The value chain is based on microeconomic principles that focuses on long-term success by viewing the individual functions of the business as cost components which use assets to combine into a good or service. The focus is on the processes and control of the individual parts. It’s too complex to use in real management discussions and instead a ‘lite’ version using a diagram to show competitive advantages is sometimes used. This mid-80s style is not a systems approach but an event management style.

The better systems approach via ITIL

A systems approach to business is what the Information Technology Infrastructure Library (ITIL) strives to define through a framework of processes, functions and a definition of service management for both business and IT. Policies and objectives for business are defined in the Service Strategy volume. Business change and transformation are worked out in Service Design, Transition, and Operation volumes. And the Continual Service Improvement volume is interested in how we learn and improve. Studying ITIL will point the way for a modern systems based business management framework.

System dynamics, a framework for thinking how company policies interact to shape business performance, was derived from cybernetics in the 1960s. John Sterman and John Morecroft, both from MIT’s Sloan School of Management, are names most associated with this framework. They would say that the end results are determined by influence and information which is governed by policies controlling actions decided by initial conditions. Models based on system dynamics fuel discussions for strategic thinking and helps simplify scenarios vital to understanding business interactions.

Applying a systems approach

Taking a look at your own life, you want to start asking some systems questions to get a better handle on why you may be focused on the details rather than the big picture. On a personal level this means that you should look at your personal goals. If you are a social networker,

do you have a plan for which sites your visit?
do you know who you want to influence?
do you track your conversations or comments?
do you have a plan for leveraging this network?
do your contacts value your networking?

If you are more of an information service, such as a blogger or an incurable Twitter user that informs others,

do you have a plan that guides your reading inputs?
do you have a list of topical outputs that your readers expect?
do you have a set of keywords that Google can index so new readers can find you?
do you know what the value of your information is to you?
do you know the value of the information to your readers?

If you are a sales representative

do you have a customer profile for your ideal customer?
do you have a list of buying funnel traits that tell you how close a sale is and what to do next?
do you have a plan for using customer feedback to improve the organization?
do you know what your customers expect from you?
do you know what to expect from the business departments that you depend on?

Follow-up posts on systems feedback, system structure and consequences of not using a systems approach will appear in the next few days.

Image by notanyron via Flickr

Too many social media accounts? Not enough customers? Right size your business for success by encapsulation.

2010-01-05T09:07:00.000-08:00

One of the great problems of business management is to determine when you are putting in the right amount of work for the value that you get out. As a social media person running a few Twitter accounts or maintaining a blog, you may wonder why you spend so much time and don’t get a good response. Maybe you’ve just realized that having LinkedIn, Facebook, Twitter, and FriendFeed accounts were keeping you from writing your blog. You can find an initial discussion of simplifying your business services in the previous blog post.

The last part discussed to simplify your business services is to get the right size of your business service. The first step is to estimate what you think the right size should be. The other steps that follow are easy such as:

test it out
figure out if it works and change scope if necessary
deploy the service

But it’s the initial step that is one of the toughest problems no matter where you encounter it. It’s the step into the great void of “I don’t know” that stymies the beginning analyst, inexperienced startup entrepreneur, or guy on the street who thinks he can become a social media expert by reading a Dummies book.

Estimating the initial scope

To understand how to create the best Twitter account, the best Facebook fan page, the best technology blog and so on, you must estimate the scope of the full service itself. The point of view from your customer is important because they don’t care about the way that you deliver the service as long as they get what they want when and how they want it.

The principle with the fifty-cent word behind determining the scope of your service is encapsulation. It is made up of three minor principles that govern the parts of a service:

clear definition of the parts
interchangeable parts, and
loose coupling of the parts

Using the three principles together gives you some grasp on how to test whether you are getting the scope of your business service right or not. This can work whether you’re launching a service to commit social suicide or adding a social network service to your plumbing business .

Clear definition of system parts

A business is made up of functional groups and connected through processes. You have Human Resources, Accounting, Manufacturing, etc. If you are just a personal information service, you blur them all together because they are not scaled up enough unless you’ve developed a working regimen that says e-mail at 7 am, RSS readers at 8 am, phone calls at 9am, etc. It’s not typical but it’s this disciplined work ethic that would produce the best results.

Outcomes are better when you specialize your capabilities and resources. It improves your health and well being when you concentrate on winter driving and don’t answer text messages at the same time. Not paying attention can put you in a snow filled embankment or sliding down Seattle’s icy hills. When you repeat your process over and over, you learn how to optimize it to achieve the best product, the fastest output or the most profit. Challenges and opportunities can be best matched up with the corporate assets that best address the issue whether that be a particular division or just a better data visualization service for Twitter like StreamGraphs.

There are several processes for business deconstruction analysis. You can define the parts by first identifying the persistent and recurring patterns of your activity. Are you a blogger that can reuse your copy for email newsletters, blog comments, magazine articles, etc.? Another set of tasks involves the separation of concerns principle which says that you should put the things that change in one pile and the things that stay the same in another pile. Maybe one reading topic of interest causes you to have a different workflow each time you research and all the rest let you use Google Reader. And another type of sorting involves identifying the ‘what’ and distinguishing it from the ‘how.’ What are topics that you want to be known for and how do the work processes help you do that?

Perhaps this would make more sense if you actually do the work. The words are simple but the thinking is hard. One difficulty is that the topics of study vary according to your size and direction of your business. Large businesses would concentrate on developing a clear data dictionary of business entities and a Business Process Model commonly developed before a large business reengineering project.

On a smaller scale it might involve a description of the ‘what’ of business commerce. These are the major business entities (nouns commonly used in business discussions) such as profit, account, sales lead, qualified lead, etc. The ‘how’ pieces are described in business use cases, Agile stories, or just done in a flow chart style that other people use and understand in the company. They are distinguished by verbs and actions.
By separating the pieces, the approach to a better service orientation is made clear. Demand can be characterized by common elements and then served by the best shared services that are available. A person who knows why they are blogging and then finds a better match for their needs will make a quicker decision when the boundaries of their service are known.

Interchangeable system parts

Just like Honeré Blanc and Eli Whitney who applied the principle of interchangeable system parts to military weapons, anyone can profit from a better way to manage complexity. By grouping pieces that are almost fully self-contained, you have a way to swap modules with other systems.

You can see this principle at work with many of the Twitter services. Instead of asking you to create a separate account on each of the helper services, they reuse the Twitter authentication so that the benefit to you is that you only have to remember your Twitter name and password. The user identification process has been made a reusable module. The service that implements it understands the public Twitter interface.

A car engine can be replaced with little work compared to hand crafting a completely new engine. All that has to be done is to lower the new engine into place, hook up the connections (the interface), and bolt it in. Is your blog host starting to give you bad mileage? No problem. Remove your blogs, pick up your domain name, and drop them into a new host. Hook up the connections and you’re driving smoothly again.

By allowing the pieces to be bundled up into a well related grouping by another fifty-cent software principle called cohesion, you can increase efficiency and economy through reduction of duplication, administrative overhead, and costs of changes. A cohesive set of tasks provided by an all-in-one Twitter shared service like HootSuite eliminates the jumping around to multiple services when you are concentrating on your networking or public relations.

Loose coupling of system parts

The interface is the key item in the service module or, in software development, the component. It must be simple and easy. This is where the KISS principle is most important. The fewer the connections you have with other modules the better. The less you have to stop and go get something in a business process, the more you can concentrate on the task at hand.

When you need to swap out a module, it’s the number of connections you have to unscrew and screw back in that makes the job easy or difficult. An electrical device has a great interface because the wall plug is easy and simple. It is a three prong connector that can only be plugged in one way and gives you access to a power generation system that you mostly forget about. Most people don't think about the coal furnaces they keep burning as they use their computers.

How easy is it for you to walk away from your office and do business at home or on the road? How many different pieces of hardware, software, files, books, resources, and comforts do you need? The less connectors you need, the more cohesive and less coupled your office module becomes.

By altering your workflow into a simpler module, you have less coupling. Let’s say you work on your laptop with a word processor, a spreadsheet, your e-mail client, and need a dictionary for translation and spelling. Let’s assume you have to use a client’s computer now instead to do the work and can’t use your laptop for security reasons. So now you need to move all your data files on to a separate portable hard drive. That’s a lot of dependencies or couplings.

Use Google apps to get looser

Instead you could set up a workflow that uses Google's free applications like Gmail and Google Docs as well as the rest of the free services on the web. You store your data there, and don’t have the need for a separate hard drive or any fees to Microsoft. This greatly simplifies the coupling and is going to be a trend in 2010 and beyond as the free services become more integrated into business workflows. New add-ons like MailBrowser for Gmail will increase the speed at which adoption takes place as familiar processes like contact management and document management are added to a market leader like Google's email process making for looser coupling.

You may eventually need to switch over to another service like Zoho apps because Google may still follow through on their promise to destroy all the data that they can’t index . When that happens, you will reap the benefits by having a loose coupling to the Google apps. OK, that’s not really true. But still, Google apps are now the 2010 favorite of Michael Arrington of TechCrunch over Zoho. Arrington decreased his personal coupling by dropping Zoho from his tech products he loves because he finds “that centralizing as many services as possible at Google makes things easier for me as a user.”

Google has followed the loose coupling principle completely by educating you about how they are transforming their services into the most decoupled they can make them with a site called Data Liberation. The anti-lock-in site explains how your data is not held hostage by their services and therefore builds the best system by using their free and paid services. I’m enhancing the fairly dry technical explanation here, but the net result is a more resilient system.

Apply encapsulation anywhere

These three encapsulation principles can apply to any system including business, software, hardware, or organizations. The plug-and-play systems on modern computers boosted replacements of parts and adoption of new peripherals quickly. Skunk works teams in business as well as Special Weapons Assault Teams (SWAT) in police forces use the encapsulation principles to their advantage. In technology, Service Oriented Architecture (SOA) is the big buzz for distributed systems and has all the same words and concepts as any other system described here.

You’ll find that by knowing and setting your boundaries of your business that you can get higher returns due to less time wasted. Your customers will be happier as they are able to find things with less clutter. And you will be more focused in 2010 on your business leading to greater success.

How to simplify your social life. Hide the back office, KISS your customers and set some service boundaries.

2010-01-04T16:04:00.000-08:00

Business managers really don’t care about social media. It's simple. They want whatever you’re doing there with your Twitface stuff to turn into sales. They care about it being profitable today, tomorrow, and next week. They care about it not costing the company another server, web development guy, and an admin to run it. Social marketing is about what goes on behind the scenes to them.

Blog readers want it simple also. They want the text served up with entertainment and information and they want it weekly or more often. They don’t care whether you’re using Blogger or WordPress or counting visits to your page. Can they get it on their iPhone or Droid? Even better. SEO and social media technology is what goes on inside or under the hood.

There are things that you can do to make sure that your customers find what they are looking for and you have the most time to spend with them. The three things that help you simplify your social life online are

hide the back office
simplify for your customers, and
set service boundaries

Hide the back office

In a restaurant, there’s the front of house and then there’s the back of house. The front is polished mahogany and soft lighting. The back is all business built with cheap and sturdy concrete and made to run efficiently. Advertising the details of your back office business service to your customers is a mistake. They don’t concern themselves with the complexity of the technical machinations that you went through to get the service provided.

Sure, some people are curious but it’s not going to add value, so it’s not worth the time. I’ve asked and got tours of kitchens before because I was curious but the staff isn’t going to offer up a pantry parade so they can maximize their customer time instead. The cooks are more annoyed that you are in their tight work quarters than happy to see you take interest in their technique.

Your customers, whether your boss or a blog reader, prefer simple. Don’t tell them about Twitter or Facebook fan pages or the thousands of choices that they have available to slice and dice the information. Sometimes a simple web page will be all that they need. Keep it simple and clean and show them only what is useful and usable to them. It will also let you maximize your time on the part that needs focus.

Simplify for your customers

Your customer relationship is the most important part of your business. No customers… no business. So you want to make sure that the customer understands what you are trying to get to them as a business. That relationship that you let them see is what you can call a service interface. The front of house is the food service interface of the restaurant for the customer. The back of house is the implementation of the food service.

Maintaining a simple and secure interface is a software programming principle but one that is applicable to business services like those that you who are doing the tweeting and the blogging are running. The business service anyone involved in using social media is engaging in is providing an information service. And the principles of interface design apply to services whether a business activity or a more technical web service.

This KISS (Keep It Simple and Stupid) principle for whittling down the unnecessary parts of the project/process/code is found throughout modern business implemented in such frameworks as Extreme Programming, Agile project management, or Lean Software Development. Maybe there are so many systems to get rid of useless jetsam and flotsam because people aren’t good at recognizing it.

There’s certainly no lack of people telling us to remove all the unnecessary parts but few people telling us how and giving us examples. Einstein is typically hauled in to the conversation when people raise the flag for decreasing complexity with an ironic over-simplification of his quote about simplicity that goes “Everything should be made as simple as possible, but no simpler.“ You have to wonder why Al couldn’t have said it that simple.

After teaching years of business and software analysis, it’s understandable to me why there aren’t better systems for performing business simplification. Business analysis is a hard job and people usually don’t have anyone to learn it from. I’ve seen some natural analysts who did it out of sheer self-preservation but no one recognized just how good they were. So I know it’s happening out there.

The business task that focuses on simplification is to attain the perfect size and shape of your business service. When it is as simple as possible, it becomes the stupid thing as the KISS acronym originally intended, and not the person using it. When the service has the right size, it has a boundary that keeps it from growing by scope creep or shrinking from budget cuts. The right size of a business service allows for efficient management today and scalability for tomorrow.

Boundary setting

The setting of the boundary of your business service is determined in an analysis phase of a project. To Steve Blank, who blogs about customer development for startups, it would be called achieving the product/market fit. To a software analyst, it would be called doing requirements gathering completely. It’s a continuous process and in reality it never ends. For a software application, the complete requirements can only be determined when the project is deployed. Then, there’s always the next maintenance release. For a business, it means keeping in touch with your customers and scaling up when appropriate.

As an information service, you should follow a process to set your business boundaries. The steps follow a simple quality regimen. They are:

estimate the scope
test it out
figure out if it works and change scope if necessary
deploy the service

If you are familiar with W. Edwards Deming, you may recognize this pattern. It’s his Plan-Do-Check-Act cycle put into context for right-sizing of your business service.

The toughest part is estimating the initial scope of the service (to be covered in the next post of this blog). You test it out by taking your service to a small group of people. Marketing departments typically have focus groups for product development testing. Software groups have alpha and beta test programs.

If you are posting comments in a social network, confine yourself to one group until you get the hang of it. If you are on Twitter, be happy with the 10 to 20 followers you have and talk to them. If you are making a few mistakes, it’s easy to correct them at this point. You have a close relationship with these beta testers and they should know that they have significant impact on your final product.

Then assess the results, change your course appropriately, and go whole hog. You’ll know if the results are right when you can ask and get comfortable answers to these questions:

Did you get what the service said it was going to give?
Did I promise something more than what I was able to deliver?
Did you expect something that you didn’t get from my service?
Would you miss this service if it were not available? (Thanks, Steve Blank)

If you don’t get satisfactory answers, then figure out what the customers want and rescope. When you finally get good responses, put it on the road.

By keeping the unnecessary details from your customers, creating a simple interface, and setting boundaries on your personal or corporate services, you’ll find that you are doing both you and your customers a favor. They get what they need faster and you end up with more time and to take care of them. Make 2010 a simple and focused year for your business strategy.

Image by d!zzy via Flickr

How to find a white blackbird. Business luck, sales lead management and hard work? Success starts with vision.

2009-12-18T14:57:00.000-08:00

Have you ever seen a white blackbird? Of course not, you weren’t looking for one. It’s not going to fly in with a label like it flew out of the local natural history museum. So you gotta know what you are looking for first.

Do you know what your ideal customer is for your business? If you don’t know, you won’t find them. And technology, marketing charts, business accounting, and 75 social networks won’t help.

Know your customer

We attention deficit media overloaded people are waiting for the next best thing also called the bright shiny object (BSO). We should be asking ourselves if the bird that is in front of us is what we are really looking for without giving it our own label. But in order to do that we have to know what that one bird will look like before we see it.

If we too narrowly define our scope by our optimism (one will fly by our house today, I know it) or our pessimism (they don’t really exist), we won’t see it. We have to be the realist as William Arthur Ward says in his famous quote “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.”

Are you willing to be lucky?

Entrepreneurs with the determination to know that one perfect customer persona bird will be rewarded after years of hard work when they finally cash in. And the public will be saying “How lucky they were to have finally caught up with that rare bird.” As Seth Godin recently said using a phrase originally from E. B. White, “How willing is your organization to be lucky? What about you in your career and your marketing efforts? Or in the people you meet or the places you go or the movies you see or the books you read?”

Seth also finds a similar stream of thought in another post that propelled Thomas Alva Edison into success. The light bulb genius who said that genius is 99% perspiration (you know the rest) said “Opportunity is missed by most people because it is dressed in overalls and looks like work.” Seth rails against those people who are too lazy to make it happen for themselves by turning down opportunity in his post Different Kinds Of Work .

I believe luck is about knowing your target and then moving towards it relentlessly. The person that spends their life researching that white blackbird and really knowing every last detail about them will have the greatest potential to find one. But they will never find one except on the web if they never leave their computer. That’s why it’s so important for entrepreneurs or marketing people to get up from their Aerons and go meet their customer.

Don't limit yourself

Bill Rice recently posted a follow-up blog to his Don’t Buy Lead Management Software post about why small organizations don't need to use sales lead management systems called Why Sales Organizations Rarely Grow. Bill sells lead management systems so I appreciate his honesty in letting us know that he knows who his customer really is and not convincing people who aren't his customer that they are. His customer is a company who has not self-limited themselves. A typical small company, he says, is not going to be his customer. The symptoms of a self-limiting sales group are lack of faith, a rigid process, lack of knowledge and fear of the new.

It’s good to ask another why question at this point and see if you can dive deeper into the root causes of the symptoms of the self-limiting sales group. What allows those five problems to surface? For most of them, I think that’s it a lack of sales leadership. But you can still have a limited sales group if you don’t address the target market and put some elbow grease into it.

The think-out-of-the-box type of brainstorming works to generate new ideas. They can address the rigid process and fear of the new. People can get trained. But without some success they will always distrust a new process. That’s one good reason why it’s so important to not do a full roll out before you’ve tested a little bit in a target market.

Back to work

But even with all that inspiration, it still takes Edison’s perspiration to make it work. And the work has to be directed to a goal that is dead on with the payload of the reason for doing it. The white blackbird is just a very small niche market that may look like another useless bird to many of the larger companies who will ignore it. But knowing that it’s the one thing that will make your fortune is the very first step to your success.

First define your goal. Then, you work. The web makes for a great research tool but any successful entrepreneur will tell you that it’s the point at which you talk to your first venture capitalist or the understand the customer by asking them why you are important in their lives that will bring you closer to your mark.

Harvesting olives

I was amazed that a small company like Argentine MaqTec with no customers but a solid vision of what was necessary to harvest olives did. They built a half-million dollar olive harvester in the middle of nowhere with no customers and persisted until they got customers. They sold one in Argentina and then three more in Australia and now have a great business. But imagine you are in the middle of nowhere, say a small farm community in north-east Iowa. What would you do if no one bought your product? It took leadership, a vision and hard work to get that company profitable.

Picture your white blackbird. You might want to check in with people who have seem them before and make sure that’s what you want. Then get working and start planning your trip so you will get lucky.

Related articles

The Colossus - My Favorite Company I Met in South America (TechCrunch)

Image by apalca via Flickr

Golden Ponies, the Peter Principle and AOL. Don’t let a successful blog lead to failure due to poor goal setting.

2009-12-11T13:16:00.000-08:00

Are you having success in your business because of social media? You may be riding a Golden Pony and your success may not last. You may scale up your usage and start to find out that your performance is faltering as you try to juggle all the types of tasks from your new focus on social media.

Business problems are not technology problems and can't be solved with the right algorithm. Business problems sometimes resist improvement. After a business problem is thought out in analysis, detailed out in design and then put to the test in implementation (or transition if you're an ITIL imam), the results may provide side effects and unintended results that mingle with the expected results.

The Golden Pony and the Peter Principle

Failure can find you in the midst of an IT project from the large to the small, after the initial success leads to increasing the scope of the project. This is dubbed The Golden Pony and attributed to Nelson P. Repenning of the MIT Sloan School of Management in the ITIL Service Strategy volume.

This is more than just a scope creep effect during the implementation of a project or a capacity planning issue. This is a management effect that removes the captain of the ship and replaces him with a robotic system as the need to carry more cargo increases. The one that knows the ship the best should be continuing to sail the ship. But instead of building a new ship with a new captain to carry the extra load, the Peter Principle is invoked once again only to see that the project, and not the manager as in the Principle, is the one to take on new responsibilities until it reaches the level of incompetency.

America Online case study

America Online (AOL) certainly qualifies as a project that increased in size until it became a walled garden within the web itself. In the 80’s and 90’s, AOL was an entertainment service with email games, D&D games, chat room games, chat environments, interactive fiction, and more. Steve Case set the course of a business goal as internet entertainment leader for the common folk since most web sites were by geeks about geek stuff. That goal paid off well.

Then in 2001, Case invoked the Peter Principle. He merged AOL with Time Warner and the focus changed as well as the value and subscribers. The business goals changed to be a content provider similar to the fading Yahoo! The focus on hooking up the common man to the internet was discarded. Subscribers peaked in 2002 at around 27 million and are currently diving down into the five million can’t-figure-out-how-to-unsubscribe zone. Price went up, competitive pricing forced free access to email, and operations took a massive cut.

Steve Case stayed on until 2003 as CEO after being a part of AOL since 1985 and several other CEOs have followed from the Time Warner pack. Was it the dot-com bust that did him in? In 2005 he remarked that AOL should not have merged with Time Warner. Steve didn’t know about his Golden Pony. Now AOL has gone public, created a new look, and so is again separate from Time Warner. Stock analysts for AOL are once again optimistic.

America Online rides off on a Golden Pony

In the Golden Pony scenario a project increases scope to keep innovations coming. Without a clear vision, the project starts to do things it wasn't designed to do and effectiveness declines. The more AOL tried to become the content rich web site for everyone, the more resources it took to manage. As these ponies grow, their visibility grows and the need grows for a more senior manager or VP to take charge of the project. The quality of the decision making starts to dwindle as the people become more and more removed from the original idea. The pony gets more stuff to carry weighing it down, the rider doesn't know where to go, and they both wander off until they die according to Repenning.

In AOL’s situation, management sold out to higher management. But in a smaller business, investment capital can be acquired to "go to the next level" which also means adding another layer of ownership/management on top in most cases. That is why many venture capitalists who really want a company to succeed want the startup to be operating on a shoestring budget. The Y Combinator software boot camp for startups led by Paul Graham have a geek culture around headache inducing work schedules and cheap family style dinners. They train them to stay focused on profitability without too much interference.

You can find your own Golden Pony

You can scale down the Golden Pony effect to an individual level with you as the only employee or maybe including a marketing assistant/office manager or two. Your customers are the readers of your blog and are the consumers of your knowledge service. Because of an initial success, adding new tasks to your personal social media effort may mean such things as

writing that extra blog post a week
sending a few extra tweets every day by learning how to use your new iPhone
reading twenty or thirty new blogs or news feeds by RSS
staying on top of the latest viral videos

The results of your new management initiative due to an increase in scope can turn your business in the same direction as AOL especially if they aren’t focused on your initial goals of why you started blogging or being an entrepreneur of any kind in the first place. The symptoms of adding more activities with new goals can be:

You find yourself having less time for the things you used to have. Quality of your normal work falls. You lose more sleep.
Budget cuts pressure your extra efforts to gain social media ground. Less money means less demand for what you produce. Less demand means more budget cuts.
More demand means you have to hire someone else or even outsource. Poorly trained staff increases. Experienced staff stays the same. Less time is available to help mentor new staff, quality suffers, demand slows, morale tanks, ROI dives, and new staff is laid off bringing stasis back.

Set and follow clear business goals

What can you do to keep the Golden Pony from taking you on a ride? Step back from your activities and make sure they all map to business goals. This is what businesses do with process reengineering when they model their activities and clarify which ones support which corporate goals. Make clear decisions about what business goals you have and then make sure that the large activities that you take on support that business goal.

Since all of the social media activities are supported by an IT infrastructure of the web and other web sites, you can also say that you have to align your IT activities with your business. You are the CIO of your organization if you choose to start a Twitter account or if you choose to start an SAP environment. And it’s the CIO’s responsibility to take the power of technology to fully unleash the power of the business. You will find that ITIL will be a source of guidance for you and your knowledge service if you want to understand the relationship between you, IT, and your business.

Image via Wikipedia

Social media burdens your business short term. Stay the course to achieve Twitter success.

2009-12-10T09:12:00.000-08:00

Do you expect social media to improve your business results? It won’t. At least not right away according to the ITIL framework. If you are personally just trying out the new kids on the block like LinkedIn or Twitter, then the danger is that you might discard it thinking that it doesn’t work.

If you are trying social media in the business environment, the pressure from executives who expect immediate financial or sales results might scuttle the whole effort and tarnish your image. How do you keep that from happening?

Maybe you decided to improve the marketing effort with public relations automation through the use of Twitter. But it’s not doing much. Short term results in an improvement program are much different than long term results. Could the problem be not having the right quality processes in place? Could you be measuring the wrong metrics and ignoring the ones that would keep the system well tuned?

After trying to stall the decrease in work productivity because people started using social networking sites and did less work, you threw your best managerial tactic at it and they just got more frustrated causing a morale decline. All of a sudden, social media looks like a big, fat, frozen Thanksgiving turkey spitting grease and catching on fire in the deep fat fryer all around the organization because you always solved the turkey problem by deep frying it. The holiday dinner turns from expecting a delicious juicy centerpiece to expecting a fast ambulance driver and fire department.

Business problems don’t always come in the same shape and sizes so you can throw your tried and true methods at it and expect the same result. If you’ve put together a quality improvement program such as a social wiki to help people discuss work issues and found that people just didn’t find it useful, it was probably because those people have already labeled it a bad idea for your company and decided to move on.

Quality programs don’t help you grow?

Why is it, according to business school professors Pinanelli and Csillag in São Paulo, that firms with a high effectiveness in the implementation of quality management principles and techniques don't do any more than just average in growth? The quality pioneers of Deming, Juran, Feigenbaum and Crosby all told us that our bottom line would be so much better if we just did a little Total Quality Management (TQM). Are these Brazilians a wet blanket on using Twitter to improve our customer reach?

The answer according to the Brazilian professors is that quality implementations and growth rate are not related by much. That means that there must be much more to growth than just a quality program.

Deliver improvements with better management

Elizabeth K. Keating and others published a journal article entitled "Overcoming the Improvement Paradox" which talks about the failures of TQM both in delivering improvements and in keeping themselves alive. The findings of that article were that it wasn't the program at fault. It was the ability to manage the program that led to the failure and demoralization of the employees.

ITIL can help you be a better manager. The ITIL framework is a business management guidebook. It’s like getting Peter Drucker’s full set of writings instead of the anthology of excerpts. And it’s focused on business using IT. Not only does it have the advice about how to structure your business but it will show you where you can improve your management and what’s really important today with so much technology improving traditional work processes.

Adding new tasks to increase your results

You may have experienced the improvement paradox in your personal use of social media. The scale is smaller but the principles for a large business are the same. You start out blogging and develop a sizable following. You find your voice and then get stalled out at a level which leads you to try to find an improvement in your process. A quality improvement plan can help your knowledge service move to the next level.

Your first step is to add other applications and interact with other web sites besides what's been giving you the good results over the last year. You may decide to start tracking some of your activity to see where if you are improving or not and exactly what’s making the difference. But you devote valuable time to the plan and have less time to blog. Less time to blog or tweet now equates to less satisfied people who were used to your frequency that now is lagging.

The new tracking that you are doing shows that the extra time spent going to new sites and tracking is slowing down your publishing schedule and affecting your rankings. Your family sees less and less of you, the dog seems unhappy, and the pressure to get things back on track will push you to abandon the extra monitoring and visits to new sites. This is the short term effect of a quality program.

Plant a garden

Or maybe you’ve implemented a new social media plan for yourself by learning Twitter, LinkedIn, and a little about RSS feeds. But you noticed that it takes quite a bit of your daily time to administer those accounts and you had to delay the plan some. You may start justifying the return back to the old ways saying that “if it ain’t broke, don’t fix it” and that these time wasters can slowly become an addiction which won’t deliver results.

That's not really wasting time as much as they are getting planted and starting to grow. Impatient people rarely plant gardens and like to visit grocery stores much more. The hunters of the old sales 1.0 world don't see the benefits of the initial decline of the benefits curve. That decline signals that time is being invested for a much better future return.

It does take time to get the results that an improvement plan will eventually deliver. DuPont, according to Keating, had to develop a training plan that discussed the worse-before-better tradeoff so people weren't disappointed at the initial poor results to get ahead of the curve and achieve better future results. For some people, that might mean that you initially replace that old laptop of yours and get not only the current model but finally get the real software that makes a difference instead of hobbling by with some free or cheap substitutes.

Push (bad) vs. pull (good)

You know the difference between a person who beats you over the head with a message and someone who tells you just enough to pull you to the edge of your seat. One is pushing as hard as they can to get you to listen and the other knows how to instill the behavior of listening. The division that is commonly contrasted between Sales 1.0 and Sales 2.0 is really just a shift in business from a pushed message to a pulled message.

Keating said that pushing the right thing to your employees is not going to drive your ROI up. On a personal level where you hand out advice over a social channel, a common push technique looks like “Amazing new secret social techniques to become a millionaire discovered in Mayan tombs.” Or it could be the current social media author promoting their ten-point plan for SEO success with an inspirational speech about the importance of any of their detailed processes and tools suspiciously only available from them.

Instead, people should pull from you when they realize the benefits of your improvement and commit to doing what really works despite all the four-hour work week ads they see. The pull from employees that you want to see is the influence that Dale Carnegie recommends in How To Win Friends And Influence People. In social media, the readers pull from each other through a soft humanized side of marketing that Chris Brogan and Julien Smith describe in Trust Agents.

Unachievable sales goals

The idea of setting unachievable sales goals is behind the fact that managerial push is always going lose effectiveness over time with people. In my opinion, management does not favor pull style sales programs because it seems like the wrong type of sales culture. These Big Hairy Aggressive Goals (BHAGs) or "stretch objectives" do help people get further along than if they were using realistic goals though.

But people's commitment rises in relationship to the amount of success a worker achieves towards their expectations. The bigger the BHAG, the more likely a better motivation turns to disappointment. Even W. Edwards Deming, a pull-style innovator, saw this and tried to eliminate the carriers of the push disease in his 14 points. He wanted to eliminate slogans, exhortations, work quotas, management by numbers, and zero level targets entirely.

Expect long term growth

Goals must be set realistically so that staff and resources are used wisely. Employees can be included in the planning process to keep it real but a real commitment comes from a desire to do better instead of a numeric goal. With enough pull from the employees, the need for managerial push is almost eliminated.

A social media program should be implemented with a long-term goal in mind. The staff must know that it will mean extra work for a little while. But after a year of effort, the results can be measured and seen as a successful venture. Expectations have to be set for short-term loss and long-term gain. Set your business goals with the knowledge that the social networking “fad” will strengthen future business relationships and the wise will make that adaptation while the foolish will not think it’s worth it.

Related blogs

The reason social media is so difficult for most organizations by Seth Godin
In Social Media, It’s Not Just Business, It’s Business-To-Business by Brian Solis

Image by Sir Garlichad via Flickr

Visualizing a social media strategy aligned with your business. How to use ITIL even if you're a blogger.

2009-11-29T18:52:00.000-08:00

As the world of IT and social media marketing encroaches more on the executive suites, the plan of action is turning from a plan and deploy model of strategy to one of engage and collaborate. Before the world of social media, technology that upset business processes forced the leaders of the company to take in consultants, experts, and create their own executive role called the CIO. These IT leaders are on the edge of decision making which shapes the way a service strategy is formed. Companies not using a CIO are either trying to understand the information glut or looking to an expert to help them out with a strategy.

These new services employed in the realm of a social media strategy are ways that the corporation has a conversation with the market and can include

Twitter,
LinkedIn,
Facebook,
forums,
online PR releases,
games,
mobile apps,
and more.

Even if executives don't understand the right ways to implement their strategies, it's still up to the executives to make the right strategic decisions to increase the profitability of the company or improve the ability of the non-profit to deliver the right service to the public.Then it's up to management to implement them in the newest technology they can find.

If the executives are now working more in a team environment, then the information is not all going to flow in the down direction. According to Carly Fiorina, a past CEO of HP, listening has become a crucial executive capability. Communications are going to be scattered about going to where the message should best flow with some people listening and others talking. The methods of communication are also shaped by the needs of the moment and range from the momentary IM to the more archival e-mail. Communication by team is more like being a part of a large family rather than following the traditional military model of order transmittal. The end result of rethinking a traditional tree organizational chart is that it takes ten times as long to keep the new chart updated with dotted lines going everywhere matching how people communicate.

Success by influence

The success of the strategy in social media, which by nature is a service management strategy, is not going to be measured by profitability alone. The more significant measurement of this conversation that social media is having with the market is going to be based on the strength of the relationship that is built between the service provider, the company, and the customer. That strength is what social media public relations people are measuring as influence.

If you are a blogger, you are also a service provider, one that provides a knowledge service. So the closer you bind with your customers, or those people who read your blog, the better success you have. That is why so many people on Twitter are saying that your success is not about the numbers of followers you have, but with the influence that you have with them. If you would like to know the kind of influence you have with your followers, a good site that uses business metrics focused on public relations is Klout. There you'll find that people can be labeled as a kind of spammer even though they have thousands of followers.

Using ITIL

The guidance of the Information Technology Infrastructure Library (ITIL) usually overwhelms people when they see it. And the introduction people generally have with ITIL is a very sanitized version pieced together for Six Sigma geeks or process wonks. Most people are never aware that the publication is about current IT situations such as social media and so much more than just a business view of service oriented architecture (SOA). That's because people had used it to manage traditional IT problems such as a help desk, or a service desk as it is now called, in a less expanded version several years ago. They never get that it has been expanded into a full MBA business model for how we deal with any business that is taking on its fair share of technology including an individual blogger.

The blogger not only can't afford the five publications priced out at over $100 per book, but probably couldn't make heads or tails about how the recommended practices should be applied. Each paragraph is a distillation of a Drucker book or a timeless business concept put into context for IT folks. In that respect, the guidance is as bloated as the software development methodology called the Unified Process (UP) which spawned a great many tools and programs but eventually flew off like a gigantic albatross into the sunset a few years ago.

I really liked the UP and how it thought out what was important. It still works very well but people have been burned by trying to implement the entire thing when it's not supposed to be implemented. If you start off on the wrong foot carrying a really large load, you eventually fall down and hurt yourself. And the people that the UP targeted and hurt got angry and tore all of its specs into smaller pieces that they could deal with. But we won't go into the lightweight UP knockoffs, XP or Agile here.

So my main goal, is to tear up the ITIL guidance into little pieces that have some ability to be implemented. ITIL is just a set of business practices that other people thought were better than most. The implementation is just not there by design. And it's not all meant to be implemented at once which would crush any less than super powered company.

As I ramble through the various volumes of

Service Design,
Service Strategy,
Service Transition,
Service Operation, and
Continual Service Improvement

I'll spotlight social marketing in general but look at the expanding social category from the eyes of the service provider which I'm calling the knowledge service (KS). The sales, social marketing, and SEO activities that the KS performs are all appropriately talked about in all five volumes of ITIL. But not in those terms.
To me it's a suitable match because the reason that ITIL was formed was to have business manage the increasing unmanageability of the IT services necessary to maintain an edge in the marketplace. In a scaled-down way the individual also uses these same technologies and therefore is bound by the same good practices that ITIL describes. But without a prescription, people look elsewhere for advice.

Aligning the business

A professionally run business whether it's managing a blog service, a news service, a small marketing department going social, a message service like Twitter, or a social network service all are constrained to using the same business practices that work. That's because business doesn't change for a new crop of technology. And the web is now becoming less of a playground of web developers and more about creating a business. Technology people are faced with the business problem of aligning IT with the business which they never had to deal with before.

IT had been ruled only by the form of the technology that they worked with. If the technology permitted it, it was a good business decision in their minds. The business strategy was not much of a consideration. But now it's the business function that is ruling over the form. In business, distinct from art and architecure, function will always rule over form. Form dictated that we get the most work done with a command line but function said we want a GUI to make it easier. It's an artist's luxury to create a form predominant web site that doesn't really do much functionally for the user except entertain them like a Twitter data visualizations like Twistori or a Digg swarm visualization. These sites merely merge art principles with data and call it useful.

Maybe the data visualizations mimic the type of confusion we feel when we realize that we are in a very asynchronous communication world. I suppose that people think that if we are doing something useful when we talk a lot about business without a coordinating strategy then an artistic view of that same mesh of connections must have some useful value. What really has value is the strategy itself that drives the communication and the methods. The business strategy is what determines the conversation and its success is measured by the strength of the bond you have with your customers. Follow your customer and your business strategy, whether running a micro enterprise blog or a mega service Bloomberg, and you will be successful.

Image by seanomatopoeia via Flickr

The three spheres of marketing influence teaches you how to blog as a business

2009-11-12T23:58:00.000-08:00

Sophie Ouellet was born with cerebral palsy but wants to blog. Her tremors kept her from writing by hand so about two years ago, she got an iPod touch and then an iPhone. Her new ability allowed her to write down appointments at a doctor's office and other reminders. When she got too tired, she typed emails in bed. Meanwhile she's become practically an expert on productivity related apps to for the iPhone and wants to blog about it. She also manages a word search puzzle company and wonders if she can make the two work together. This is my advice for her.

Three spheres of marketing influence

Marketing campaigns must deliver on three different levels to optimal. They are the personal, the professional, and the corporate. This is true whether you are online or not. People need to trust you, understand your product, and think that you are green all at the same time to get that perfect storm that leads to the sale.

Once you take your business online, you are but a shadow of your real self and the methods by which you express your ethical, business, and civic values become subservient to the web. Your business may still have personal contact by voice or in person but that's when the online rules don't apply anymore. The online and the offline personas do have to match up or an inconsistent value system will lead a person to distrust you and go somewhere else.

So to summarize a little here, the three spheres of influence in marketing are

personal - influenced by trust - generated by ethical behavior
professional - influenced by products/services - generated by business behavior
corporate - influenced by social responsibility - generated by civic behavior

Sphere predominance

A business is focused on business goals. Marketing will highlight one of the spheres as being the dominant sphere because it drives the business goal the best way. Most companies prefer that the marketing campaigns are of a corporate focus so that the corporate values with the slogan attached are supported through the research and development down into the products even affecting the employee belief system if possible. This is the whole package of a traditional marketing campaign.

In other companies, such as Google, it's the employee and their expertise that then generates the corporate agendas and encourages personal excellence through playful design, omnipresent white boards, open meeting areas, and great food. Personal ethics are that of being the best geek that you can be. And another type of enterprise based on the person is just that of a person who has values that you want to follow. They don't have any real expertise nor do they have a corporate agenda usually. We usually call these people movie stars. Some have talent and some even manufacture salad dressing for charitable causes.

You might be a charismatic leader that a person would follow anywhere in business such as a Bill Gates whose personal sphere of influence is strong. But all it takes is a smile and a firm handshake in many places to strike that friendly chord without any other talent. If you only have a can of WD-40 but don't have a corporate story or anything except engineer chops like Norm Larsen, then it can still work. But you have to keep coming up with great products and not lose them somehow. If you only have a great public image without the best products or the best people, sometimes that works as in the cases of keeping GM and many investment banking firms afloat.

But each company, based on their business goals, focuses on one sphere more than others and the marketing campaign becomes even more powerful when all three come together. A firm grows and becomes more competitive when they start increasing the strengths of those other spheres.

Keyword alignment

When designing a marketing strategy that spans all three of these spheres, it's essential to coordinate the brand and image. Media campaigns must be embargoed so that the press reinforces the release of a product. Logos must be redesigned. People have to use a different vocabulary. Ads release an onslaught of new imagery and ideas.

Online, the brand is reduced down to a set of keywords that are seen to the online eyes of the search engines. This set of keywords must match up to what people are asking for or the demand for those keywords needs to be created. It's the same as a lucrative market that's tapped because you've found what kind of persimmon peeler a person really wants. Or you've told people that peeled persimmons are the next big food fad and they believed you.

Personal sphere activities

What we need now are the types of activities that express the spheres of marketing. The personal is most easily summed up as the wisdom of Dale Carnegie in his classic How To Win Friends and Influence People that was first published in 1937. The reason it has been so successful is because people found the substrate of sales activities in it. The bedrock of the close is supported with all of the other business and corporate principles, but without personal values, you'll just get people upset.

Dale wrote the text for his courses that he titled Public Speaking and Human Relations. He realized that people needed to not focus on the business principles entirely and start paying attention to their soft skills which would make them more happy and more prosperous.

This same problem has been countered in the digital age in 2009 by Chris Brogan and Julien Smith. Their Trust Agents reads like a modern day Dale Carnegie in telling people how to be a real person online. The chapter on the Human Artist could have been written by Carnegie himself had he been publishing on the web. Carnegie's first few principles of:

Don't criticize, condemn or complain.
Give honest and sincere appreciation.
Arouse in the other person an eager want.

make you wonder if he was talking to a group of rogue online marketers and grumpy social networkers. Instead these were just the immigrants and farmers of the day learning how to do business much like we are today online.

So, if you want to find out how to do the right personal things online because you're a little rusty with the ability to friend a tweeter on a blog, then pick up Brogan and Smith's book It will humanize your experience and make you realize why people enjoy social media so much. The book also covers topics on marketing niches, transparency, and building on your strengths. And pick up a copy of Carnegie's book as well to humanize your business. It will amuse you to know that they both start out by talking about major crime lords in the first chapters.

Professional and corporate sphere activities

In the professional sphere there are the business principles at work. We follow the functional distinctions of sales, marketing, public relations, executive management, product development, etc. On the web, we have tried to mimic the same core areas and don't understand always why they don't work For instance, sales, a very non-computer personal sphere centric discipline, when transferred over to the web, loses almost all of its power because the human element is not in play. Marketing, on the other hand, is enhanced because of the ability to collect and track information.

Knowledge and expertise is what makes a person stand out in the work force or in education so that they become a thought leader. This was dominated by the professor type before the digital age so schools became leaders in business thought. Now online, anyone can become an expert with influence through the writing of a blog. The use of keywords helps define the types of people that find you and is the essence of the field called search engine optimization.

The corporate sphere is active with good will projects, corporate charitable events, environmental reformulations and helping communities get back on their feet. This type of web activity can be found in charitable alliances from Drew Carey paying $1 million for the @drew name and donating it to LiveStrong to Google's Data Liberation Front to Ford donating cash to a Mashable charitable cause.

Sophie Ouellet's advice

Wonderword Special Project Coordinator and digital photographer Sophie Ouellet was born with cerebral palsy. She currently manages the company that publishes word search puzzles in over 225 newspaper worldwide and sells related books and calendars. Her posting on LinkedIn requested help for monetizing her product website which is where I started commenting but the comment got way too big.

Here's my advice. Her market is made up of fans that come to the site for puzzles and those that are searching for free puzzles. Her professional site is characterized by a keyword set such as "free word search puzzles online." The way to monetize the puzzle site is to improve all three spheres of marketing. The professional sphere will include things like improving the design, the navigation, the shopping experience, the SEO of the pages, the copy of the pages, and the amount of information about her word puzzles. The personal sphere will include things like customer comments, emailed responses, customer requests, stories about people solving the puzzles, etc. And the corporate sphere can be improved by sponsoring contests, offering discounts on products to organizations putting on puzzle events, and possibly having her husband who writes the puzzles offer to speak at appropriate events.

She does want to blog but not about the puzzles. A blog is a way to improve the professional sphere of a site but the blog keyword set must be aligned with the rest of the site or it will misfire in the market. Since she enjoys photography and practices yoga which improves her health, she prefers to write about that which she knows won't interest her puzzle hunters except tangentially.

That means that she needs a separate blog focusing on her determination and spirit to turn her life into an inspiration to others. She can review the best iPhone apps for business productivity and talk about how nothing stops her from enjoying life with her word obsessed husband. She can post photos that show her creative side and encourage others to get stronger through yoga. That sounds like a winner.

As an online knowledge service she has three spheres to her business. I suggest a regular blog and photos for the professional sphere. She should find other inspirational sites and let them know about her blog postings to promote it. The personal sphere will include comments, and common social networks links for reposting and tweeting. And the corporate side of things might be speaking engagements or doing fund raising for cerebral palsy once she gets well established.

The connection between the two however is a weak link. I would make sure to put a Wonderword link on her personal blog and vice versa by adding a link on the Wonderword site. But other than that, there is no real reason to connect the two.

Sophie has real value to a market she hasn't even begun to tap yet. I encourage everyone to check out her sites and see what she does with her blogs in the future. Good luck to you, Sophie!

Image by Captain Billy Guns via Flickr

Nobody wants to be optional. Design a social strategy based on competition to be the not optional choice.

2009-11-11T11:38:00.000-08:00

Nobody on the web wants to be optional. Everybody wants some attention. A social media strategy has to meet that demand so the competition doesn’t drown you out.

To clarify your strategy for social media, you have to start with competition. Everybody in business at some point will face the enemy and you must be trained and fit to head into battle. Sometimes you might have met the enemy and the enemy was us. Not specifically you as in the Pogo enemy meaning, but it happens when you have a captive market because you are an internal organization.

Information technology groups traditionally have been designed to serve the enterprise and don’t do much, if any, marketing and sales. It’s usually done at the managers’ meetings through trust and promises. But these owner-customers are not committed to use the only game in town because they don’t have to. LinkedIn can give you a trusted network to find solutions from multiple clandestine meetings in technology groups.

Another place social networks have influenced traditional internal service providers is through the freelancing sites that bring together bidders on projects and sometimes help you manage them with necessary transparency. The top freelance sites these days are (in order of Alexa ranking):

Small and mid-sized companies have the greatest benefits in using these outsourced web development and graphics services but even government and non-profit organizations are feeling the competition.

Value niches

What makes an internal technology group compelling is the value that they bring to the table. The strategy behind not losing your customers is to know how you provide a different and unique value to your customers.

Customers usually want value in economic terms, but with public services, such as government agencies, it can also come in the form of social welfare. What customers can perceive is your giant web site filled with a tremendous stock of knowledge and thought leadership. What they can perceive is your great reputation through superior customer service. They also look at the price tag and match you up with your competitors’ products to see if they want the dependable Blackberry, the innovative iPhone, or the uber-innovative Droid.

Strategic assets

Another way that you look at competition is in what kinds of assets you have versus what your competitor has. Assets aren’t always physical and if we consider the typical knowledge service, or blogger / tweeter / social networker, we find that the assets are mostly intangible. We all have the same computer and the same internet. It makes you ask the question why, when I tweet my pithy aphorisms, I don’t get offered book deals and television show contracts too just like Justin Halpern did this week.

The strategic asset here, the grumpy dad, provided Halpern with his crusty core competence in the tradition of Will Rogers and Archie Bunker. He also has a distinctive performance for keeping up the dialog and an ability to participate in the market that appreciates it. I’m hoping that he has a chip off the old block enough to keep up his durability for the hungry media.

Thinking about these assets is the same way that an investment in production systems or research and development labs is made. There’s considerable value in people, processes, knowledge and infrastructure as well as intellectual property like brands and patents.

It’s thinking about these assets and competition through a structured approach such as ITIL that allows you to create real social networks that work. Your ability to be a knowledge service will depend on how you compete.

More than money

Just having a cost advantage over your competitors isn’t enough. Efficiency isn’t enough because the price isn’t that high whether I follow Justin or I follow Roland Hedley. Lowering your cost anymore would mean that you pay people to follow you. And there are strategic businesses even based on that if all you want is followers but I wouldn’t call it doing social networking. It’s scummy old Public Relations 1.0.

Other strengths can be vital assets. We can earn more respect by helping others learn a new way to leverage social networks or take on a new scale because of the amount of attention we’ve drawn on the web. As a knowledge service, you can better serve your viewing public by understanding the uncertainties, compromises and questions that your viewers have.

The key to the strategy is to decide on the business goal you have that makes you different from the rest of the marketing bots. You have to be perceived as the better value. You have to be the not optional choice.

Image via Wikipedia

Is your social strategy lost in translation? Find out what the real needs are to get to the gold.

2009-11-10T20:48:00.000-08:00

You’ve just been told that you are the new blogger for your company. We need a blog. And it has to be good. What strategy do you choose to serve your customers? For most people who are struck by lightning in business, they move through phases of shock, lesser shock, adaptation, and finally the ability to hide any problems that may arise because nobody else knows what blogging is about.

How about going out and reading all of ProBlogger blogs? Then you’ll be a good blogger. Darren Rowse must know what he’s doing because that’s what he talks about and makes a living with. We’ll follow whatever he says. Maybe you’ll ask what people are talking about from the customers that you hear about and write about what they talk about. Keep the customer happy, right? But what about those SEO folks who keep pestering me with all of the keyword research stuff. Maybe I should just focus on the top keywords that bring in the dough. That will keep the operation efficient.

Well, although all of these arguments have their good points, there’s quite a bit of complexity in the problem and it doesn’t always give up a simple answer. Being in a blog for the long run is going to give you a different result than if you just blog a few times to see how it feels.

What we need in a strategy for blogging or any other type of social networking activity is a strategy that will focus on goals and tell us when we’re not meeting those goals and why. When we make a mistake, it should become evident and the numbers that we collect will tell us what to fix and how to get those numbers back on track.

Just talking to customers is a fulfilling activity, but people aren’t always clear, certain about what they want, or correct about the real needs that they have. The ability of a person to take what is needed and translate that to what is required is a skill that takes years of practice to master and lots of humble pie to eat. It takes work to do the job and if you assume that your customers should know the right stuff, you will be losing the battle to those people who stop and think about it.

It’s the end result that the customer sees that seals the deal. It’s not the Excel spreadsheet that has the list of items the customer said they wanted to put in the final product. This is what you can call a real fulfillment of a service provider. The most subtle part of this thinking thing is to really understand what needs to happen. Plans are good, but results are gold.

Image by nicolacassa via Flickr

Twitter is still retro and needs these feature improvements. When will the real TwitterScript and TwitterAds appear?

2009-11-10T00:56:00.001-08:00

I thought Twitter was feeling retro recently and it hit me that it looked like DOS and early operating system GUIs did. I started thinking about the kinds of enhancements that worked with DOS commands and enhanced the early Windows before they knew what was really useful and what wasn’t. The current Twitter app wars are showing lots of similarities.

You’ll have to adjust a little to the shift in technological culture as we’re moving from a fixed file system to a dynamic information channel system. But the ideas I think still work for both.

Back then, it was fun to see what kinds of small applications coders built to work with files because DOS wasn’t all that powerful. As some other guys from another OS improved DOS on their past experience, DOS developed a very Unix-like behavior. Actually any new code to try whether useful or not caused a little thrill for someone who had more than a handful of stored files.

Popular Twitter sites and apps

Many of the Twitter apps out there today don’t do much but are still popular just because they are interesting and do one thing fairly well. Let’s call those Twitter utilities. Something like Friend or Follow can be done easily on your own but it takes time. Better to just click a tab and see your friends, fans, and followers.

Then there’s a category of the better Twitter GUI. I remember using terribly functional programs that super-powered your file management system past the point of what a very indecisive admin would even want. Twitter has been slow to give us the features we need so others came to the rescue like

Seesmic
TweetDeck (my favorite)
HootSuite, and now
Brizzly (in beta and requires an invitation)

Others types of applications did a new kind of useful task and extended the current ability of the OS to manage files by creating shortcuts or scheduled tasks or something unique. Often Windows would add that to the next release. These are the Twitter improvements that you see being added slowly like lists which were implemented as groups, searching which so many sites have tried to do hoping that the Twitter API would not cause it to completely collapse, and trending topics. Check out some of these searching sites and trend watchers (number indicates Alexa ranking – lower is better):

Surchur – trending on Google, Yahoo! and Twitter (22,511)
Trendistic – trending with charts (39,314)
Monitter – trends and monitoring (52,687)
Twazzup – better than Twitter search (44,541)
Trendistic search - better than Twitter search (39,314)
Collecta - much better than Twitter search (64,456)
TwitterSearch – find birds. Really. Not up yet. (268,779)

Some cool improvements that Twitter could stand to add are the mute button in Brizzly to temporarily turn off seeing noisy tweets from one person you follow because they are attending a conference and you don’t want to read about their travel experience.

Just got into Tampa. Wow, it’s hot.

Just got to the hotel. Wow, it’s big.

Another Brizzly feature I like is the automatic viewing of the real URL instead of the bit.ly version. And it also shows the real picture or video instead of the TwitPic link version of it. I like the New Followers pane in TweetDeck and somebody should add a People I Don’t Have in a Group group or private list because I lose people amongst all those grouping things.

There’s a set of administrative tools that you find on a app with a large menu or targeting that special niche to do better than what the status quo can do. DOS told you the basic count of files while other programs gave you numbers that sliced and diced everything it could find. Twitter tells you basic followers, following and now lists and listed. But now

all want a part of that business.

And finally there’s the games and entertainment that everyone eventually loses valuable work time with enjoyably. You couldn’t have technology like an operating system without a game like Star Trek or solitaire to relax with. Twitter provides endless amusements as well such as account based tweeting games for trivia or skills at the accounts of @playtwivia, @twitbrain, @tweetbomb, or @beatmytweet. Much like the files of ASCII art, the content of tweets provide amusement for all at sites like:

TweetingTooHard – best tweets from people who overrate themselves
Twistori – life slices of love, hate, think, believe, feel and wish
BlogHer Zeitgeist – visualizations

I’m not really loyal to the current batch of applications because five years from now, they won’t be around. Most of the utilities and other programs that supported the old DOS and Windows have left the scene also. One or two of the companies are still around like Symantec or Norton but there isn’t room for many. You still have quite a few utilities out there but they aren’t as popular as when it was fun to find a new command to show off to your friends.

What Twitter is missing

What is interesting is the part where Twitter isn’t following the general functions of the older OS functions. The current API, or programming interface, that programmers use to access and sometimes crash Twitter is like the set of DOS commands. In DOS you could write a batch file of commands and in Twitter you can write a program with a list of commands.

But there’s one thing missing: the command prompt. I’d like to do more than send a direct message, reply or follow someone with a click. I want a flashing cursor with the power to mute, direct to a list, delay a tweet, transfer followers to my other account, send to multiple accounts, etc. That can all be handled with a command line.

Files are like Twitter accounts and the directories for organizing files are like lists. We also need better transparency on the account information and the lists. How long has this person been on Twitter? What’s the average length of time this person follows someone? How long does it take this person to follow back after being followed? Give me a command line to query that kind of data. Then I can get the numbers of my friends, my fans, and my followers without a web site. I could also get all the folks who aren’t on any of my lists easily without resorting to endless dialog boxes and keeping track of them on paper. And maybe even pipe them into a new list.

I am asking for a scripting language here that hasn’t been invented yet, yes. Let’s call it TwitterScript even though there’s an ActionScript code library by that name. That’s because I program and I know the ease of use and power that it provides. It could open up self-managed tweets, accounts, and lists so much that many of the sites would fade away. But other sites would be able to provide a GUI more powerful than before based on it. How about using variables in the script so it can grab your account name or statistics and make the command easily reusable by anyone?

Twitter is still in its infancy and is growing. One impediment is that there is no cash flow from using the service so they’re getting off to a rocky start. But when they implement more data capturing by introducing more data to be used like geocoding and maybe even some demographic information, then they’ll be able to sell that info much like Google is selling their data on search queries.

But Google makes most of its money on ads. I expect Twitter also will start to use sponsored tweets that get pushed out every hour or so to appropriate accounts. Let’s call this one TwitterAds. It’s AdSense all over again as Twitter will auction off your ad for the most tweets per day to the accounts that mention your keyword. That’s what people who have valued Twitter at about $1 billion recently probably are thinking.

I’m a big supporter of keeping the noise down on my accounts. I don’t like commercials and I won’t like it when they start collecting their due from us who use the service but don’t pay. So I hope that they just keep it subtle as much as AdSense ads aren’t banner ads.

Twitter will have to grow up soon. Business demands it. It’s a great information channel for us as knowledge providers. I look forward to all the powerful features that they will be implementing and know that I’ll be paying for it somehow. And then, in a few years, you’ll be able to say “Back in the days of Twitter 1.0 I used to have to go to another site to search…”

Use business strategy to be a better blogger

2009-11-08T16:49:00.000-08:00

Image by David Sifry via CrunchBase

Are you a blogger? You’re more than that. Just as a journalist is someone who used to ask questions and write down the answers, you have more going on that just the bytes that are published. With all of the relaxing of the physical constraints that kept independent writers from expressing their views, most of which was money, the ability of information to be produced and consumed for almost free is creating a boom of blogger opining. Business is experiencing the same change and has come up with strategies that help them manage the more powerful technology better.

I’ve been a knowledge service off and on for most of my life. In college, I started with a low cost manual typewriter as an arts and entertainment reviewer and columnist, and then became a zine aficionado and editor for a local science fiction periodical where I moved up to an electric typewriter. I kept personal journals with pen and paper which I enjoy reviewing from time to time to see how my thinking has changed. But nothing quite like the immediate indexed and published architecture of the web puts you on the professional map quite as quickly and thoroughly as a writer.

This web architecture has increased the value of us personal publishers that I call knowledge services because they help encourage networking of those ideas more than the "Letters To The Editor" column ever did. All the extra widgets that technology adds to your blog to help readers respond, relate, comment, learn and understand are the basis for how value is being created.

The more you use these extra features to bring that communication of your message to your blog, the more you define yourself as a distinctive blogger with a market edge that others will take notice of. You push out of the pack and run ahead with qualities that others will copy. You are competing in a business that is full of other knowledge services and the strategy is not just to write but to write and become a market leader.

Well, you can become a market leader if you are focused on being a business. Otherwise, you just have a nice personal journal that your Aunt Tillie is proud of you for. But some of us want to have our opinions heard and are using the technology for a goal and not just for entertainment.

Being in business as a knowledge service also applies to any other activity that you may involve yourself in on the web, including your Twitter account, photo management accounts, forums, groups, and all sorts of social networks. Any activity that processes information for consumption on the web as a distribution channel is a knowledge service. It is always a part of a product that is being offered and people know it as the identity of that online person or product which they learn to trust.

In 2005, Hugh MacLeod, in his Gaping Void blog, called this digital shadow a global microbrand which he attributed to business writer Tom Peters’ idea of the personal brand or “Brand You.” Robert Scoble developed the idea of a personal brand also. Hugh said that the global microbrand has existed for a while, long before the internet was invented. It was the well-known author or painter, selling his work all over the world or a small whiskey distillery in Scotland. It could have been a small cheese maker in rural France, whose produce is exported to Paris, London, Tokyo etc. or a violin maker in Italy or a classical guitar maker in Spain or even a small English firm like Holland & Holland making $50,000 shotguns. The common factor here is that they are a new kind of flexible, smart small business and serve a relatively small number of people. Big businesses drool over their profit margins and adaptability. Their customers are knocked out by what they do and how they do it.

IT organizations are experiencing the same issues but at a different scale. But the key processes by which they deliver that value to the customer are the same. Both the individual blogger and the large IT organizations are finding growth and prosperity in using the new tools of the trade. It’s this growth that is creating the challenges for service management to understand and allowing them to take advantage of new opportunities.

The management of the knowledge service is what I want to keep a conversation going about here. The discussion will initially be on just strategy but will progress into all phases of service management and use concepts from the Information Technology Infrastructure Library (ITIL) to understand what the best business solution is. ITIL is a great collection of modern business techniques for folks encountering technology and wanting to get it under control.

Transactions define social networking, not SEO

2009-11-03T14:52:00.000-08:00

Understanding who we really are online is difficult. The more involved we become with social networks the more we become a digital shadow. But the shadow we are should be the same as the shadow we want to be. Our reputation is based on how we are perceived.

We should look at ourselves by the boundaries of what kinds of activity we conduct and create three basic identities of individual, professional and corporate to best manage our online lives. Individual identity is about friends and family. Professional identity is about the knowledge service we are offering people online. And corporate identity is about the company image we work for but do not have executive control over. We understand that each identity has a different business goal and is represented by a different set of keywords if we distill down our presence using SEO tactics. That’s relevant but not complete.

Most people are online to conduct a type of business that gives them value. It’s the context of those transactional events that give us a view of who we are and the meaning behind the activity we conduct. Just looking at a set of SEO keywords is as good as reading about the ingredients in a dinner on the best date of your life. They accurately convey data but lose the context. Business is conducted because of value and not because of raw data. People want the data to sizzle and not just become processed steak in a tube.

For the most part, the boundaries of ourselves online are determined by the cost of the transactions that we do. It’s not just a PayPal payment or a vote on Digg which is an individual type of transaction cost. But it’s the total cost of value exchange between you and another party that involves costs of finding content to post, the account setup and maintenance, the cost of another reading and clicking through to your content, and managing the content sources so you always get the best information the soonest to make sure that you are putting out what your social subscribers expect from you.

If you are using another knowledge service (person, web site, news feed, etc.) to deliver content either to you or to the social marketplace so that you can become a better knowledge service, you will have costs associated with making sure that your content stays online and taking action when things don’t always go the expected way, say like when servers die or networks get overloaded.

Sometimes the cost is worth owning the hardware yourself so you have in-house control over the assets that your information service depends on. Sometimes, it’s more sensible to place the risk in the cloud and have a web site manage the service. These boundaries that govern the choice of whether to “build or buy” or sometimes rent, and are likely to expand or contract with the current infrastructure and technology advancements. It was Ronald Coase that won the Nobel Prize in Economics for this idea. He would probably say that the increase in the number of independent self-employed people who are contracting with one another over the web today is a result of the lowering of transaction costs of marketing.

The ability of an owner of a computer and a web browser to access free software has increased to where doing basic business on the web has no cost at all. Free Google office software, web sites services, blogs, graphic manipulation, access to audio, photo and video files, and much more are all at the end of a URL typed into a simple browser.

But the transaction costs of a social relationship are not just financial. It is in the other types of assets that the value of your knowledge service also increases. It’s in the ability to compete, the sharing of your content, and in the quality that you provide that gives you the best customer service for a common commodity like Zappo’s shoes. The more we understand all of the values of these types of transactions, the more we will understand ourselves online.

This is part of a series on an ITIL view of social networks covering business functions such as marketing, sales and PR using technology down to the individual knowledge service, a person who is using social networking to provide value to others.

Economics Nobel prize supports social networking

2009-10-13T09:44:00.000-07:00

Social network people should applaud a few dismal academics for appreciating their importance in participating in decision making. A surprising choice in Nobel prize winners was made this year (no, not Obama) that you may not have heard much about but was most certainly earned. Social scientists Elinor Ostrom and Oliver Williamson won the economics prize for work that advanced the cause of economic governance by saying that voluntary associations work well to solve real problems. A social network is a voluntary association.

Typical topics of economic discussion are vertical integration and horizontal mergers. Let’s take Facebook’s recent acquisition of Friendfeed as an example of a horizontal merger. It doesn’t look like it makes sense since Facebook could just build the same thing instead of buying and merging the odd culture of those lifestreaming folks. The traditional view would be to assume that Facebook was increasing their market power even if the customer was forced to support the purchase by viewing more ads. But Mr. Williamson would call it a move to greater efficiency since the merger would reduce costs and create more value in the overall economy than what the increase of price would cause the consumers.

One of the more important themes in Mr. Williamson’s work is trust. Social networks, as well as Williamson’s coal purchasing networks, are underpinned by these types of relationship specific contracts. I’m sure that Chris Brogan would agree.

Then there is the overwhelming dominance of Twitter in the social world even though Compete stats seem to show it peaking right now. It’s more of a vertical integration as it adds functionality it needs control over instead of working with the smaller sites that have developed piecemeal solutions. Traditional economists would have a problem with the free service, citing the late Garrett Hardin’s work on “the commons” or a collaborative owned goods, saying that it will become overused since everybody wants to get in before others do. This usually leads to recommendations to put more controls on the resource or let the government manage it.

But Ms. Ostrom, the first woman to receive a Nobel prize in economics, would say that this collaborative sharing of the resource, in this case the microblogging conversation, has worked and will work. The success of the platform depends on several high-level governance decisions. She recommends that the resource must have a policy of who gets to do what, how to resolve problems, administrative rights privileges based on the benefits they get, peer users administration or using staff that listens closely to users, and peer users who participate in the governance process.

Twitter isn’t in danger of running out of goods but it is in danger of being diluted in value as a service which in my mind is the same as having an attribute of easy exclusion. To combat this, Twitter needs more governance to keep it a common-pool type resource instead of a private good that no one wants or can control.

Ms. Ostrom doesn’t like top-down control and that has been obvious as the corporate world flails around when they try to push a message down through traditional PR channels when the social world has been confirming Ms. Ostrom’s theories about collaborative control. Her message is that privatization and over-regulation work to decrease value in the economic system. If ownership of a valuable public resource like the elephants in Namibia that are now seeing a reduction in poaching because the local residents share in the financial benefits, I think that the decision making efforts of Twitter, Facebook and the like should look more to their users for how to manage their valuable services.

Business has been hearing this message over and over in the form of listening to your customer. But now the message is more than just paying lip service. It means letting the control of the resource be in the hands of the collective. But Mr. Williamson’s research makes sure to not let this dissolve into a complete bland democracy as he supports the secrecy of the board room decisions as a governance necessity in some cases as well. This surprising choice for Nobel economics is a welcome move from the mathematical into the real world which is where we are using our social networks.

Governing twoubled tweets

2009-09-30T18:37:00.000-07:00

Governance, not even including social media governance, is a dismal topic usually reserved for executive meetings late in the day and people who read Greek mythology for fun. But it’s a crucial word that helps clarify why you use Facebook or Twitter even if you are the only person running the entire business. It involves setting policies and making decisions about who makes the decisions. There’s also that sticky part about having a mean auditor rap you on the knuckles when you don’t follow the course.

If you are working in sales or marketing or any other business function, it involves the knowledge of business world-order and what kinds of decisions each manager should be able to make individually or in agreement as a management team. Another valid organizational form of governance is just telling them what to do because “I said so.” As you can guess, the business value doesn’t work out as well in the dictatorial model.

Since the web world has infiltrated the marketing world and handed the reins over to sales people to do their own marketing, it seems that there is contention for the decision rights of just who gets to decide what. Sales can go find a new social news site to post product announcements on. Marketing can sell direct from their web site. The ability of everyone to do their own intertwined marketing and sales has opened the flood gates of unaccountability due to the lack of social media governance.

If a sales person releases information about a new product before a launch because they’re excited about it, does that make it a policy violation? If the competition finds out, it is. If they tell the newspapers on the phone, it likely is, especially if they print it before the embargo date. But if they tweet it and no one finds out, then what? No one has a tweeter policy to figure it out until it damages the impact of the Twitter marketing campaign and somebody’s twiddling head has to roll.

Social media has been putting pressure on the C-level offices to think about how they manage Twitter, Facebook, LinkedIn, and other types of uncontrollable web accounts. But they are only out of control because the policy is not clear on how they are used. Back in the good old days, it used to be good enough to distribute an email policy and not show up after work wearing a corporate logoed shirt in places of ill repute. Then it was a web site policy that wasn’t followed unless you enforced it with an annoying firewall which blocked more than you wanted. But now people carry your brand around with them on the web as email addresses and enter strange web sites that their less web-savvy bosses would cringe at.

So what’s the answer? It’s basic business governance. If the policy makers understand what business is doing and why, then it’s easy to understand what role the tools play in the processes of the business. The most likely culprit today is not understanding the tools.

I really don’t blame business people for not understanding what the business value of these tools are. The social media experts are just building their personal brand. But it’s also clouding the waters with new terms for their interpretation of the old terms. Chris Brogan, a great promoter of social media and author of Trust Agents, calls the six characteristics of trust agents Make Your Own Game, One of Us, The Archimedes (another old Greek!) Effect, Agent Zero, Human Artist, and Build an Army. Actually, I think the one social media characteristic that business people want to hear about is Stronger Customer Relationships. Do we have to wade through all the Archimedian Artistic Army Agent lingo? It’s attention getting for sure.

Let’s take Twitter as an example. Many old school people think that twittaholics just like to talk about themselves and the whole thing is like high school kids texting each other. It’s not. The types of business processes that can be done with Twitter just by following twitterers and searching the twittersphere are:

Monitoring trends
Monitoring buzz on your company
Monitoring buzz on competitors
Monitoring significant events to sales accounts
Measuring influence of thought leaders by retweets and followers
Finding people to sell direct to
Increasing network of contacts to use for later promotion activities

… and lots of others. The business goals in line with these twactivities (I’m really getting tired of the pun now) as I see it are to

Manage a product portfolio
Increase brand reach and improve sentiment
Position products in market optimally
Maintain strong customer relationship
Increase brand influence
Increase revenue
Increase market share

Each of the business goals are a reason why the activities are to be done. Each business activity should be mapped to a specific business function and the management responsibilities assigned accordingly. Some are the better in sales or marketing, and some are more appropriate for product development or public relations. Wherever the people exist for those functions is where the Twitter activity should be accomplished and also where the auditor goes to rap a few knuckles if they are following Oprah instead.

OK, so who of you Greek mythology perusers knew that Zeus was a symbol of intelligent governance of the world-order? Instead of Hymn to Zeus, a Hymn to Social Media Policy Makers doesn’t have quite the same zing. Still, a little praise and encouragement to follow social media governance is never going to go out of style.

Brian Solis and the PR elephant in Kansas City

2009-09-18T14:34:00.000-07:00

Brian Solis, Principal of FutureWorks, an award-winning PR and New Media agency, the guy who came up with the PR 2.0 catchphrase and co-creator of the Social Media Club, spoke in Kansas City last night to a group of PR people attending the Public Relations Society of America chapter meeting at the new Power & Light district’s glitzy AMC Mainstreet theatre. I think the crowd was expecting more of a Purple Cow and got an elephant in the room pointed out to them instead.

The wake-up call from Brian about the state of public relations was to go do something about the pitiful state of the commercial propaganda that people are calling public relations. He had the gall to tell us that it wasn’t a “summer of love” any more and it has to be all about business. No clapping ensued.

In fact, I don’t remember any cheering, ataboys or rude remarks yelled at the podium for the duration of his thoroughly convincing hour of downright obvious conclusions that PR has changed from a top-down control the audience form of communication to that of a participatory form of influence. Bloggers have influence. You should pay attention to bloggers because bloggers control your brand. Simple.

Instead of shouting your message louder, the soft-spoken Solis wanted us to believe that you should think about the person you are trying to reach and then, listen closely now…, TALK to them. He wants us to use social media to have a conversation. He wants people like executives to have a conversation with real customers instead of with middle management who have conversation with the interns and then write a blog. You let interns make the decisions on what to tweet and eventually you end up with Habitat’s hash tag spam PR nightmare that happened in June this year.

Of course, he let some of the executives off the hook by realizing that if an executive like the shoe superstore Zappos’ Tony Hsieh aligned the entire corporation around solid social guidelines that would always speak the same about the culture, the brand, the core values, etc., then every employee would be tweeting and twittering the same message and Tony wouldn’t have to even have a Twitter account.

But Tony does have a Twitter account because he knows the importance of the conversation. He has 1,317,394 followers and doesn’t even talk about shoes. Here’s the most recent tweet today from the magical multi-millionaire of MBTs on @zappos:

Can't sleep. Head filled w/ deep thoughts. Wondering what happens if a vampire bites someone that just ate garlic bread?

Tony Hsieh has met the audience and the audience is himself. He’s completely transparent and believable. And he empowers his employees to create relationships and conversations that influence people to buy his shoes online. According to Brian, that’s putting the public back in to public relations.

Brian is the creator of the Conversation Prism also and had posters for sale beside his recent book. I’m not sure the meaning of the prism was understood as I heard acclaim that he could get so many little pieces on the diagram instead of knowing what the analysis really said. He does his homework well and tends to fill his charts up with very relevant detail underscoring his principle that you need to be relevant when you talk to your audience. I respect him more for having the data than just making it up like some social media authors. But I need better glasses even sitting in the third row in a movie theatre viewing his TMI PowerPoint slides like an influence diagram showing hundreds of people relationships that crashed the demo.

I think we’ll be hearing from Brian Solis in the future because he understands that public relations is an offshoot of sociology and psychology. It’s about understanding how the “human network” communicates with each other. He said that the currency of the exchange is attention. When we engage our customers, we give them attention and they give us their trust and loyalty. The influence that we garner is what public relations has always been about instead of controlling the message and the response.

Another reason that we’ll have to keep hearing from Brian is because the elephant isn’t moving out of our room very fast and he’ll keep telling us about it until we do something about it. Keep the conversation going, Brian. We’re listening.