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The Power Of Groundbreaking Social Technologies 1 Charlene Li Altimeter Group Twitter: @charleneli Email: [email protected]

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Expomanagement presentation by Charlene Li at IESE in Barcelona, Spain, November 7, 2011

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Page 1: IESE HSM Barcelona Presentation by Charlene Li

The Power Of Groundbreaking Social Technologies

1

Charlene LiAltimeter GroupTwitter: @charleneliEmail: [email protected]

Page 2: IESE HSM Barcelona Presentation by Charlene Li

© 2011 Altimeter Group

2

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© 2011 Altimeter Group

OUT of CONTROL?

© 2011 Altimeter Group

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© 2011 Altimeter Group© 2011 Altimeter Group

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© 2011 Altimeter Group© 2011 Altimeter Group

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© 2011 Altimeter Group

It’s about RELATIONSHIPS

© 2011 Altimeter Group

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© 2011 Altimeter Group

Strategy Lead Prepare

Agenda7

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© 2011 Altimeter Group

Strategy Lead Prepare

Agenda8

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© 2011 Altimeter Group

Strategy Process Stages

Discovery IdeationFormulatio

n & Alignment

Planning Roadmap

9

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© 2011 Altimeter Group

Strategy Process Stages

Discovery IdeationFormulatio

n & Alignment

Planning Roadmap

Set context • Determine key objectives• Level of strategy (corporate, biz unit, brand)

10

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© 2011 Altimeter Group

Align social with key strategic goals11

Examine your 2011 goals

Pick ones where social will have an impact

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© 2011 Altimeter Group

Corporate

Risk managemen

t

Leadership development

& culture

Value metrics

Business unit

Consistency across brands

Social strategist &

COE

ROI metrics

BrandChannel focus

Community manager & education

Engagement metrics

Objectives differ by level12

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© 2011 Altimeter Group

Use appropriate metrics at each level13

Corporate

LOB/Geo Stakeholde

rsSocial

Strategist/Community Manager

Business metrics: revenue, CSAT, reputation.

Social media analytics: Insights, share of voice, resonance, WOM.

Engagement metrics: fans, followers, clicks.

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© 2011 Altimeter Group

Strategy Process Stages - Ideation

Discovery IdeationFormulatio

n & Alignment

Planning Roadmap

Collect and prioritize strategic options• Metrics-based value assessment• Prioritize against objectives

14

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© 2011 Altimeter Group

Impact• How does it

support an objective?

• What metrics matter?

Readiness• Are there

people who can do this?

• Is there budget?

Risks• What are the

risks if we do this?

• What if we don’t?

Priority• Does this

initiative enable other work?

Evaluate each initiative15

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© 2011 Altimeter Group

Define Your Strategy With Objectives16

Learn

Dialog

Support

Innovate

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© 2011 Altimeter Group

How does social media matter to B2B?

Chief stakeholders may not be using social media.• But lieutenants will be.

Social media is impacting how B2B decisions are being made.• Background research• Expertise• Search results impact

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© 2011 Altimeter Group

People in B2B use social media for work

Use Twitter to find or request business information

Ask questions on Q&A sites

Participate in online business communities or forums

Visit company blogs

Visit company profiles on social media sites

Read user ratings/reviews for business products/services

29%

49%

51%

55%

62%

62%

18

Source: 2009 Business.com Business Social Media Benchmarking Study (n=2,393)

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© 2011 Altimeter Group

Strategy• Learn

• Dialog

• Support

• Innovate

Lead Prepare

Agenda19

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© 2011 Altimeter Group

Track brand mentions with basic tools

20

What would happen if every employee could

learn from customers?

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© 2011 Altimeter Group

Integrate monitoring with workflow21

From Radian 6, to be acquired by Salesforce.com

Other providers

AlterianBrandsEyeBuzzmetrics CymfonySysmosVisible Tech.

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© 2011 Altimeter Group

No monitoring in place

Tracks brand mentions using basic tools (Google, Twitter)

Centralized monitoring but not actionable in business unites

Deep monitoring to prep & support campaigns

Monitoring & analytics support integrated into everyday workflow

Go beyond basic monitoring to analytics

22

Make course corrections nearly real-time.

Use predictive analytics to anticipate demand.

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© 2011 Altimeter Group

Your customers want to be “known”23

I walk into my local grocery store

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© 2011 Altimeter Group

The store knows it’s me24

• Social check-ins (Four Square, Yelp, Facebook Places)• Near Field Communications

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© 2011 Altimeter Group

I get coupons to use right away25

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© 2011 Altimeter Group

And connect my phone to in-store GPS shopping cart

26

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Community insight platforms27

» Communispace and Passenger offer

online focus groups solutions.

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© 2011 Altimeter Group

Private communities give better control • Get input from specific communities• Can target specific hard-to-reach communities

But they are hard to create – and maintain• Who needs to be included? Excluded?• Provide non-monetary incentives/rewards for

participating in the community• Deserves and requires dedicated community

manager• Integrate into your company’s support and

innovation process

Pros and cons of private communities

28

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© 2011 Altimeter Group

Go beyond traditional data to understand your customers

29

Demographic

Geographic

Psychographic

Behavioral

Socialgraphic

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© 2011 Altimeter Group

1. Where are your customers online?

2. What social information or people do your customers rely on?

3. What is your customers’ social influence? Who trusts them?

4. What are your customers’ social behaviors online?

5. How do your customers use social technologies in the context of your products.

Socialgraphics asks key questions30

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© 2011 Altimeter Group

Engagement Pyramid31

Curating

Producing

Commenting

Sharing

Watching

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© 2011 Altimeter Group

Engagement Pyramid - Watching32

Curating

Producing

Commenting

Sharing

Watching

Watch videosRead blog posts

Listen to podcasts

Read tweetsRead discussion

forum posts

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© 2011 Altimeter Group

Engagement Pyramid - Sharing33

Curating

Producing

Commenting

Sharing

Watching

Share a linkShare photosShare videosWrite a status

updateRetweet

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© 2011 Altimeter Group

Engagement Pyramid - Commenting34

Curating

Producing

Commenting

Sharing

Watching

Comment on a blog

Write a reviewRate a productParticipate in a

discussion forum@Reply on

Twitter

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© 2011 Altimeter Group

Engagement Pyramid - Producing35

Curating

Producing

Commenting

Sharing

Watching

Write a blogCreate videos or

podcastsTweet for an

audience

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© 2011 Altimeter Group

Engagement Pyramid - Curating36

Curating

Producing

Commenting

Sharing

Watching

Moderate a wiki or discussion

forumCurate a

Facebook fan page

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© 2011 Altimeter Group

Spain Italy UKUnited States

Curating <1% <1% <1% <1%

Producing 30.3% 38.7% 52.7% 26.1%

Commenting 45.1% 37.4% 54.0% 34.4%

Sharing 58.6% 63.6% 79.3% 63.0%

Watching 82.2% 77.3% 89.3% 78.1%

Engagement Pyramid Data37

Source: Global Wave Index Wave 2, Trendstream.net, January 2010

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38

Conduct research to identify the social behaviors of your

target customer

Also identify:

• Where are they online: Surveys or brand monitoring

• Who do they trust: Surveys

• Who do they influence: Survey or brand monitoring

• How they use these tools in context of your products: Most often surveys.

When you first understand your customers, your marketing efforts will naturally unfold.

Putting socialgraphics to work

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© 2011 Altimeter Group

Listen and learn from your customers.

Start with basic monitoring tools, but quickly evolve them.

Invest in analytics that matter. Use metrics that are relevant to your business.

Understand the socialgraphics of your customers.

Summary - Learn39

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Strategy• Learn

• Dialog

• Support

• Innovate

Lead Prepare

Agenda40

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© 2011 Altimeter Group

Conversations, not messages

Human, not corporate

Continuous, not episodic

The New Normal41

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Boeing uses blogs to engage42

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© 2011 Altimeter Group

Kohl’s engages directly with customers

43

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© 2011 Altimeter Group

Vodafone UK uses Twitter to proactively communicate with customers

44

Vodafone UK humanizes their Twitter account by

including pictures of their support team and

identifying different respondents by an “^”

and the team member’s initials.

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© 2011 Altimeter Group

Spain Tourism used multiple channels to encourage dialog/sharing

45

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© 2011 Altimeter Group

B2B can also use Facebook46

• Develop relationships with job candidates, prospects, and current employees

• Insert your content into newsfeed of fans

• B2B is really people to people

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© 2011 Altimeter Group

47

Also encourage dialog inside the company

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© 2011 Altimeter Group

Premier Farnell supports engineers with community, and employees with “OurTube”

48

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© 2011 Altimeter Group

Give out Flip cameras/smartphones• Set up an internal “OurTube”• Transcribe conversations into emails and posts

Ask people for best practices, reactions, advice, opinion in areas of passion.

Recognize key contributors.

Getting people to share within your company

49

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Tivo joined an existing community50

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Advocacy – A five-phase approach51

Phase 1: Internal

Readiness

Phase 2: Identify

Advocates

Phase 3: Build

Relationships

Phase 4: Put

Advocates First

Phase 5: Foster Growth

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© 2011 Altimeter Group

Tesco engages influencer blogs52

Blog post series highlights & drives traffic to blogs by

Influencers. Twitter feed encouages engagement too.

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© 2011 Altimeter Group

Have an authentic conversation with your customers that they want to have.

Engage across and through social communities

Engage off of your Web site. Recruit an army of customer advocates. Respond to your prospects and customers

in real time.

Summary - Dialog53

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© 2011 Altimeter Group

It’s about RELATIONSHIPS

© 2011 Altimeter Group

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© 2011 Altimeter Group

Strategy• Learn

• Dialog

• Support

• Innovate

Lead Prepare

Agenda55

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© 2011 Altimeter Group

Vodafone Italy and Spain take disparate, effective approaches to online support

56

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© 2011 Altimeter Group

Ritz-Carlton managers monitor Twitter for real-time service

57

Property manager helped

unhappy honeymooners

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© 2011 Altimeter Group

DellOutlet supports sales with Twitter

58

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© 2011 Altimeter Group

iRobot ties discussion boards into customers support

59

iRobot escalates unanswered

questions into support centers

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© 2011 Altimeter Group

Salesforce.com Service Cloud ties social channels back to customer data

60

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Solarwinds’ community is strategic61

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Real-time isn’t fast enough. Integrate “social” support into your

support infrastructure. Scaling support to meet the

groundswell will require that you create your own groundswell.

Summary - Support62

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© 2011 Altimeter Group

Strategy• Learn

• Dialog

• Support

• Innovate

Lead Prepare

Agenda63

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© 2011 Altimeter Group

Participate in crowdsourcing to understand how it works.

Create a culture of sharing and collaboration within the company.

Encourage “intrapreneurship”.• 85% of innovations involve optimizing one

parameter.• Use social media to collect and prioritize ideas.

Reduce “power distance” with open leadership and management.

How to encourage innovation64

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© 2011 Altimeter Group

Italian Telecom launches small business social network

65

Wind Italy displays support, innovation towards the small

business community

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© 2011 Altimeter Group

Danish bank asks for help to improve mobile banking on Facebook

66

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© 2011 Altimeter Group

Fiat Mio, the world’s first crowdsourced car

67

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© 2011 Altimeter Group

Starbucks involves 50 people around the organization in innovation

Over 100 ideas have been

implemented

68

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© 2011 Altimeter Group

P&G uses reviews to improve products

69

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P&G goes outside for innovation

P&G made outside-in

innovation a priority

70

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Innovating can come from any customer or employee interaction.

Dedicated innovation communities require significant commitment and nurturing.

Extend your firewall to bring customers into your organization.

Summary - Innovating71

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© 2011 Altimeter Group

Strategy Process Stages

Discovery IdeationFormulatio

n & Alignment

Planning Roadmap

Strategy statement• What you will do• What you won’t

doScenarios development• Implementation roadblocks• Company and leadership implications• Risk identification• Build resilience

72

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© 2011 Altimeter Group

What’s the Next Big Thing?73

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iPhone Debut

Jan 2007

Facebook

PlatformMay 2007

Facebook

ConnectJuly

2008

iPhone App Store

July 2008

Nexus One Android DebutJanuary 2010

iPad DebutApril 2010

Facebook

TimelineSept 2011

How Time Flies74

Our notions of sharing & privacy have changed as

well

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© 2011 Altimeter Group

75

Identify and prioritizing disruptions that matter

User Experience•Is it easy for people to use?

•Does it enable people to connect in new ways?

Business Model•Does it tap new revenue streams?

•Is it done at a lower cost?

Ecosystem Value•Does it change the flow of value?

•Does it shift power from one player to another?

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© 2011 Altimeter Group

“How personal relationships, individual opinions, powerful storytelling and social capital are helping brands…become more believable.”

1) Likenomics (credit to Rohit Bhargava)

76

Understand the supply, demand, and thus, value of Likes as social currency

See http://bit.ly/rohit-likenomics for Rohit’s take

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© 2011 Altimeter Group

Likenomics evaluation77

User experience impact - moderate• People with high social currency will enjoy

benefits, richer experiences, receive psychic income.

• People with low social currency will find ways to get it.

Business model impact – moderate• New economics create opportunity for people

who understand Likenomics to leverage gas.• The cost of accessing social currency will

increase, and raise barriers to entry. Ecosystem value impact – none

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© 2011 Altimeter Group

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2) Social Search – Beyond Friends to Interests

Social sharing rises as a search ranking signal, esp in the enterprise

Create a social content hub to gain traction

Use microformats to highlight granularity (e.g. hProduct & hReview)

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© 2011 Altimeter Group

Social Search evaluation79

User experience impact - Moderate• Search becomes more useful, relevant to people.

Business model impact – Moderate• SEO takes on a different dimension, rewards

companies with social currency, personalized experiences.

Ecosystem value impact – Moderate• New power brokers are social data/profile

players who capture activity data and profiles.• Google has little of either.

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© 2011 Altimeter Group

Social monitoring merges with Web analytics• HOT: Omniture, Coremetrics/IBM, Webtrends

Technology like Hadoop makes it easy for companies to tap “Big Data”• E.g. New York Times making its archives public• Twitter archived by Library of Congress• Facebook Cassandra, Amazon Dynamo, Google

BigTable Data visualization tools make it easy to

digest Balancing privacy and personalization

3) Big Data80

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© 2011 Altimeter Group

Big Data evaluation81

User experience impact - Low• Most users won’t directly experience Big Data.

Business model impact – High• New businesses and initiatives can be started at

very low cost. Ecosystem value impact – Moderate

• Owners of Big Data repositories can assert control, demand payments for access.

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© 2011 Altimeter Group

82

4) Game-ification

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© 2011 Altimeter Group

TurboTax used “games” to encourage sharing and support

83

Social design can enter training, collaboration, support, hiring

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© 2011 Altimeter Group

Gamification evaluation84

User experience impact – High• Experiences get richer, more engaging

Business model impact – Moderate• Work gets done faster, cheaper.• New organizational structures and cultures

emerge. Ecosystem value impact – Low

• Service providers will remain focused, boutique firms.

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85

5) Curation

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Curation evaluation86

User experience impact – Moderate• User authority established from better curation,

better content is organized well. Business model impact – Moderate

• Easier for businesses to create their content. Ecosystem value impact – Moderate

• Individuals challenge media and brands as authorities – and publishers that siphon off ad dollars.

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© 2011 Altimeter Group

User Experience

Business Model

Value Networks

Likenomics Moderate Moderate Low

Social Search

Moderate Moderate Moderate

Big Data Low High Moderate

Gamification

High Moderate Low

Curation Moderate Moderate Moderate

Summary of disruptions87

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© 2011 Altimeter Group

It’s about RELATIONSHIPS

© 2011 Altimeter Group

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© 2011 Altimeter Group

Strategy• Learn

• Dialog

• Support

• Innovate

Lead Prepare

Agenda89

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© 2011 Altimeter Group

OUT of CONTROL?

© 2011 Altimeter Group

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91

Photo by stanjourdan via Flickr

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92

Photo by Steve Rhodes via Flickr

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Photo by Steve Rhodes via Flickr

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Social media helps brands listen…94

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..and respond. But it’s not enough.95

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Open Leadership96

Having the confidence and humility to give up the need to be in control,while inspiring commitment from people to accomplish goals

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10 elements of openness97

• Explaining• Updating• Conversing• Open Mic• Crowdsourcing• Platforms

Information Sharing

• Centralized• Democratic• Consensus• Distributed

Decision Making

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© 2011 Altimeter Group

Explaining strategic decisions98

Open book management

Managing leaks

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99

Updating with every day stuff

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Kohl’s has conversations on Facebook

100

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Open Mic: When people contribute101

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Crowdsourcing new Walkers flavour102

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Open platforms make it easy to partner and share

103

Open architecture Open data access

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104

Centralized Democratic

Consensus Distributed

Decision making models

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170 employees 100 modules with

“module owners” One person makes

the final decision in each module

Social technologies make distributed decision making possible

105

Manage complex tasks Organizing for speed

65,000 employees 16 Councils,

50 Boards make strategic decisions

Joint leadership of each group

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© 2011 Altimeter Group

Determine how open you need to be with information to meet your goals

106

Openness audit available at http://bit.ly/opennessaudit

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Complete the Openness Audit107

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Traits of Open Leaders108

Authenticity Transparency

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Transparency as an imperative109

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How Best Buy became open and social

110

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Barry’s first post111

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The Premier Black Fiasco112

6.8 million emails sent instead of 1,000 test

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© 2011 Altimeter Group

Developing Open Leaders

© 2010 Altimeter Group

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“You can imagine the Chatterati creating as much value as an SVP in the organization by sharing their institutional knowledge and expertise - and we should look at compensation structures with that in mind.”

- Marc Benioff, CEO of Salesforce.com

© 2010 Altimeter Group

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© 2011 Altimeter Group

Strategy• Learn

• Dialog

• Support

• Innovate

Lead Prepare

Agenda115

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© 2011 Altimeter Group

Strategy Process Stages

Discovery IdeationFormulatio

n & Alignment

Planning Roadmap

Roadmap• Three year plan• Six month milestones• Capabilities assessment and

preparedness• Metrics in place to measure progress

116

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Read the full report, Creative Commons

Open Research Report: Social Business Readiness117

Methodology

• 63 Interviews and briefings with ecosystem contributors

• Survey data from 144 social business programs

• Analysis of 50 social media crises

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Climb the Social Business Hierarchy of Needs118

Empowerment, Cross-Learning, Measurement

Asset Inventory, Best Practice Sharing,

Center of Excellence

Dedicated Team, Workflow, Crises Preparedness

Objectives, Policies, Education, Access

Holistic, Real-timePredictive

Foundation

Safety

Formation

Enablement

Enlightenment

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© 2011 Altimeter Group

Highlight where you are strong, where you need to develop.

Don’t create strategies that you can’t execute.

Demonstrate impact of strategic work. Categories for readiness assessment

Assess your readiness to be social119

• Communication

• Mindset

• Roles

• Stakeholders

• Monitoring

• Reporting

• Customer Profile

• Market Analysis

• Processes

• Organizational Model

• Education

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Benchmarking Social Readiness (Before)

120

December 2009

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Benchmarking Social Readiness (After)

121

April 2010

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#1 Create a Culture of Sharing122

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Blogs establish thought leadership123

CEO Richard Edelman has been blogging consistently since September 2004.

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#2 Discipline is Needed to Succeed

Can you add value?

Evaluate the

purpose

Respond in kind & share

Thank the person

Unhappy Customer?

DedicatedComplainer

?

Comedian Want-to-

Be?

NegativePositive

Yes No

Do you want to

respond?

No Response

No

Yes

Take reasonable action to fix issue and let customer know action taken

Are the facts

correct?

Gently correct the facts

No

No

No

Yes

Are the facts

correct?

Does customer need/deserve

more info?

Yes

Explain what is being done to

correct the issue.

Yes

Is the problem

being fixed?

Yes

Let post stand and monitor.

No

Yes

NoYes

Yes

Assess the message

Adapted from US Air Force Comment Policy

© 2011 Altimeter Group

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Five ways companies organize around social media125

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#3 Ask the Right Questions about Value

“We tend to overvalue the things we

can measure, and undervalue the

things we cannot.”

- John Hayes, CMO of American

Express

© 2011 Altimeter Group

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A Framework For Social Analytics127

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+ Value of purchases- Cost of acquisition

____________________

= Customer lifetime value

The new lifetime value calculation

• Percent that refer• Size of their networks• Percent of referred

people who purchase• Value of purchases

• Percent that provide support

• Frequency and value of the support

+ Value of new customers from referrals

+ Value of support+ Value of ideas

+ Value of insights

Spreadsheets for all calculations available at open-leadership.com

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35% increase in LTV captured129

Year 1 Year 2 Year 3

Number of customers 10,000 5,000 3,500

Gross profit of purchases $400,000 $200,000 $140,000

Cost of acquisition $150,000 $25,000 $17,500

Net profit $250,000 $175,000 $122,500

Traditional LTV/customer $74.89

Value of referrals $30,000 $45,906 $45,287

Value of insights $10,000 $5,438 $4,080

Value of support $5,438 $8,156 $6,120

Value of ideas $2,000 $1,000 $1,000

Net profit and value $297,438 $235,500 $178,986

Revised LTV per customer $101.48

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Fans

Large network

Refers

Doesn’t refer

Small network

Refers

Doesn’t refer

Find more fans with

large networks

Encourage fans to make

more referrals

Make decisions with metrics130

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No relationships are perfect

Google’s mantra: “Fail fast, fail

smart”

#4 Prepare for Failure

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Create

Sandbox

Covenants

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Structure your risk-taking and failure systems to create resilience

133

1. Conduct pre- and post-mortems.• E.g. Johnson & Johnson after Motrin Moms.

2. Identify the top 5-10 worst case scenarios.• Develop mitigation and contingency plans.• E.g. Ford’s “lost” Fiesta.

3. Build in responsiveness.• E.g. Best Buy’s Black reward card.

4. Prepare yourself for the personal cost of failure.

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Audit the last few failures you and your organization experienced.• 25% - what happened.• 25% - what you learned.• 50% - what you will do next.

Keep a failure file. Identify risk-taking training needs. Build failure into your planning and

operating processes. Create support networks for the inevitable

failures.

Action plan to prepare for failure134

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It’s about RELATIONSHIPS

© 2011 Altimeter Group

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© 2011 Altimeter Group

Charlene Li

[email protected]

charleneli.com/blog

Twitter: charleneli

For slides, send an email to

[email protected]

For more information & to buy the

book

visit open-leadership.com

© 2011 Altimeter Group