By Christopher Rollyson Mashing up Edison and Weinberger wires together two thinkers that usually exist in different worlds, and reveals key facets of Knowledge Economy disruption.
By the way, Noodles represent a new kind of post, bits of thought that are unstructured and relatively brief. Many won’t even be split into “extended” articles. They are partially inspired by twitter.
Yesterday I heard David Weinberger (one of the Cluetrain authors; his new book is Everything is Miscellaneous) talk at Big Frontier, and the big insight I took away doesn’t sound like much but, peel the onion, and it’s quite profound. Knowledge is inherently social. We vet our thoughts by sharing them with other people. Interaction helps us to refine thoughts and coalesce them into knowledge by knocking off the rough edges, and we co-design knowledge by collaborating.
Continue reading Noodle I: Mashing up Edison and Weinberger
By Christopher Rollyson Three CIOs Share Vision and Techniques for Creating the Networked Enterprise—Facebook and Tagging Creep In
 After James Owens’ luncheon address, the Executives’ Club of Chicago’s 2007-08 Technology Conference series opened with the CIO of the Year Award and a sneak preview of the 2008 Chicago Technology Outlook Survey.
Then a diverse panel of executives took the stage to discuss the role of the CIO in the “networked economy 2.0.” Bahman Koohestani, Senior Vice President & Chief Information Officer, Orbitz Worldwide, Paul Mankiewich, Chief Technology Officer, Alcatel-Lucent and Karenann Terrell, Chief Information Officer, Baxter International, shared their visions for the evolving role of the CIO and IT. John Gentry, Partner and Managing Director, CSC Consulting, moderated the panel discussion with aplomb. The Club’s quarterly Technology Conference took place October 16 at the Chicago Hilton.
Although the panel represented such diverse businesses as pharmaceutical giant Baxter, global network equipment provider Alcatel-Lucent and travel sensation Orbitz, all were very focused on how CIOs needed to enable a new level of innovation by fostering a new level of trust and adopting a networked model—for everything. That means shared risk taking and trusting people.
Although their remarks had an appropriate enterprise focus, in Analysis and Conclusions, I will take the argument into the customer arena: only by extending their trust to customers will enterprises realize sustainable innovation in the long term.
By Christopher Rollyson How Social Tagging Changes the Economics of Ecommerce was a geeky session that explained how a potent mix of “people like me” navigation and digital leverage can drive sales and profits + The secret to emerging markets?
 The Global Human Capital Journal’s coverage of the Forrester Consumer Forum 2007 continues with this session on social tagging. Before your eyes glaze over, bear with me and learn how this simple, revolutionary social technology can help your customers to help your business. Forrester’s Sarah Rotman Epps moderated a discussion with Brian Rosenblat, Online Retail Industry Lead, Endeca Technologies and Jay Shaffer, Vice President Marketing, PowerReviews, who represented companies that offer social tagging solutions, and they all shared numerous examples.
This was one of the most “actionable opportunity” sessions of the conference: tagging is a relatively unknown, simple, yet transformational Web 2.0 phenomenon that will gain traction in 2008 and explode in 2009. If you aren’t doing it, you will be at a significant disadvantage to your competitors who do.
The Global Human Capital Journal published the overall conference wrap as well as in-depth coverage of several sessions. Access all through the link to the conference logo (right).
Social Tagging: What It Is and How It Works
- Tags are digital “post-its” that users put on all elements of content: articles, pictures, videos. These post-its are searchable by the person who “tagged” the content as well as by everyone else (unless the tagger makes it private).
- Many people compare tags to bookmarks, but this underrates tags in two ways: 1) one page has one bookmark, while you can put as many tags as you want on a page, or on part of a page; 2) browser bookmarks live in folders, but tags are far more accessible because they live in clouds, and tagging systems have superior search and browse capabilities.
- Users tag things to make them easier to find (again think of post-its or highlighting in a book or magazine). When you install a tagging solution, users can tag pages, pictures, videos, podcasts with a combination of existing tags and their own tags. Creating or using a tag is a one-click process, so it’s easy. People do it.
- Search engines use software algorithms, but they are limited in “seeing the forest for the trees.” They have no sense. There were some humorous examples of search result gaffes, like Marriott’s number one suggestion to a North American user for a “romantic hotel” was in—Yerevan, Armenia. With tagging, real people have viewed the content, reacted to it and categorized it for other people. Notably, customers do this on their own time, at no minimal marginal cost to the Website.
- 22 million of online consumers self-identify as taggers, but they fit the model of typical technology early adopters (technology enthusiasts, entertainment-oriented, male). This probably indicates that tagging will probably become much more mainstream in the coming years.
- Some major sites that use social tagging are: ACE Hardware, Amazon.com, Brookstone, RadioShack, Sheraton, Staples, Toys “R” Us, Walgreens and Yahoo! Travel.
How Social Tagging Relates to Selling Online
Social tagging is of high interest to e-commerce sites because it can help to increase average sale by better matching the right product with the right customer and increase profitability by decreasing returns. Tagging is currently used for two main purposes: 1) to support alternative categorization and navigation and 2) to organize and monetize user-generated content. Tagging is especially powerful when it is seamlessly combined with customer reviews. Brian’s and Jay’s companies often work together to provide such an offering.
 Social tagging is especially useful when selling a vast array of products, when choice is overwhelming for customers (think amazon.com or an office supply site).- Yahoo! Trips recently added tagging as a way to make its one million user-created Trip Plans more organized and accessible. It recommends destinations based on Trip Plan tags, combined with user profiles and behavior. Prior to user tagging, the trips were not very accessible and added little value to the site.
- Tags supplement Website navigation. They can lead people to find exactly what they want more quickly, and this increases the average sale because customers can search “in their own language” (because tags are customers’ language).
- Tags let users find products in new ways: user-generated tags are searchable: for example, “chick lit” is a tag that has been used for many products on amazon.com. People can tag in their own language, and the combinations of tags are powerful digital breadcrumbs.
- Users will often share what they use products or services for, and what they like/don’t. Companies can use tags for real-time customer surveys (i.e. “I use this product for a, b, c or d” where these are tags). Companies can use this information to significantly impact sales by tweaking descriptions. The Web, unlike other marketing, enables companies to experiment quickly.
- Companies use social tagging to increase customer insight and set customer expectations (through customer reviews) to decrease returns. Because customers have a better idea of a product’s strengths/weaknesses, they are less likely to buy and return and they are more willing to buy because they feel more confident.
- Additionally, solutions like Endeca analyze tags on the fly and offer alterative navigation that appears as a type of sub-navigation. This is revolutionary because it enables emergent navigation that it partially guided by other customers’ tags. Moreover, it is all digital and very inexpensive for the company.
- Here are some examples: Buzzillions.com,
Analysis and Conclusions
- Tagging is an elegant, powerful way to let customers guide other customers—asynchronously. Customers offer free advice to their customers.
- In many categories, user-generated content (UGC) is increasing significantly. As the Yahoo! Travel example showed, UGC can be difficult for companies to work with because they didn’t create it and may not understand it. Other customers are often very willing to organize it and categorize it for companies.
- Tagging is a technique to standardize communication: tags are interchangeable, reusable building blocks that people combine to express their opinions. Since they are digital, software can analyze and infer conclusions via sophisticated algorithms.
- Although tags are standardized, they are infinitely extensible: people create their own tags on the fly.
- In many cases, customers are far better qualified than company employees to help other customers—because they are necessarily customer-focused. A customer who tags a cell phone will use tags to describe the phone in a much more realistic way than a product manager will.
- Tagging is inherently social, and it undoubtedly increases website stickiness. It is a simple way to let customers give something of themselves, thereby investing in a site and developing a stronger bond with it. When combined with reviews, shopping becomes much more social. Customers’ voices make Websites more human and enjoyable and effective.
- If this weren’t enough, think about the killer app: social tagging is the way to enter emerging markets. Product introduction teams conduct expensive studies but cultural differences and gaffes increase risks tremendously. Tagging enables your customers to help each other. Moreover, in emerging markets, new middle classes are primarily knowledge workers and are online and excited about the online world by default.
- To learn more, get into the act by tagging this article in del.icio.us; here are my del.icio.us tags for Social Tagging; or email me. Also notice that blogs, wikis and all social Websites have tagging functionality built in. In Global Human Capital Journal, for example, each article is tagged, and you can search articles by clicking on tags; moreover, you can subscribe to tags via RSS, but that’s another geeky discussion. If you want to learn more about how that works, see the GHCJ’s Tools page.
By Christopher Rollyson Will China’s Rise Lead to an Environmental Catastrophe? summarizes The Economist Chicago debate, examining the environmental fallout of the Chinese economic supernova—sibling rivalry rears its ugly head.
 In 2007, nary an RSS feed or the page of a newspaper (for those still inclined ,^) does not mention China’s exploding impact on the global stage: China is truly an economic supernova, and it is breaking almost any record for development that is laid before it. However, China’s breakneck development is accompanied by grave environmental fallout: for example, as the host of the Beijing 2008 Olympic Games, the city is designing extreme measures to ensure that the air is clean enough for the athletes to breathe. The chief culprit is coal, a key source for China’s insatiable need for electric power, and a resource that the country has in abundance. For key facts on China, I suggest The Economist’s Country Briefing or CSRA’s Emerging Markets category (in depth) or China tag (mentions).
The Economist and WBEZ 91.5 FM presented an Oxford-style debate on the effect that China’s rise would have on the environment at Millennium Park’s Harris Theater on 24 October 2007. National Public Radio’s Worldview host, Jerome McDonnell, moderated the session in which two debate teams argued their cases in front of the audience, which then voted on the debate winner. As a baseline, McDonnell polled the several hundred member audience prior to the debate, and we were evenly split and “too close to call.” Continue reading Will China’s Rise Lead to an Environmental Catastrophe?
By Christopher Rollyson A Paradoxical Proposition, Are People More Real Where They Live Their Dreams?—Zapped by Conventional Thinking
 Gaming and virtual worlds like Second Life have been a hot topic due to their novelty and, where gaming is concerned, their Gen X and Gen Y demographics. However, early adopter marketers who have flocked to virtual worlds to create presences there have often been disappointed. Forrester’s Paul Jackson is a long-time follower of gaming and virtual worlds, and he gave a fascinating and valuable session on the status and best practices for how marketers can approach this new medium. He also gave a rough ROI picture of investing. Just like anything, if you approach virtual worlds with appropriate goals, you can benefit significantly.
An Overview of Games and Virtual Worlds
Jackson began with a history of virtual worlds and gaming, which are both inherently social (and usually sticky). Gaming began in the 1970s with multiuser Dungeons, and many early games were played on the VAX. The 1990s introduced 3-D graphics and VRML as well as massively multiuser games like Lineage, EverQuest and the World of Warcraft. Then Jackson presented a 2×2 to define games and worlds in terms of the average stickiness, which I’ve reproduced below right (click to view larger). For more on the games themselves, see Wikipedia’s History of MMORPGs and its List of MMORPGs.
Virtual worlds such as Second Life are not games, their inhabitants will insist. Most see themselves as serious world builders; they are not there to amuse themselves. Although not the first, Second Life opened the gates for marketers. There.com is another virtual world, and its parent has a division that consults to the military (simulations).
 Jackson addressed worlds and games that had a heavy social element. MMORPGs (massively multiplayer online role playing game) like World of Warcraft involve significant time investment like virtual worlds, but the emphasis is on overcoming the challenges of the game. (The two “low-spend” categories are less involved but still attract intense attention to their adherents who are overwhelmingly hard-to-reach Gen Xers and Gen Yers. Cyworld‘s penetration in South Korea is north of 90%, according to some estimates). Webkinz are borderline, since they are plushies (stuffed animals) that also include an online component.
The Potential for Marketers
For marketers, virtual worlds and games offer a new frontier to connect with customers. Jackson counseled marketers to approach with realistic goals, and he outlined a two-fold value proposition: these worlds have very passionate members, and if your company supports residents, they can form a relationship with the company and the product (that goes far beyond that of other media). Secondly, it is likely that the “virtual reality” element of games will increase its impact on all elements of digital communication over time, so your company would do well to understand the “in-world” environment. Elements of the virtual and gaming environment will become mainstream. Moreover, a presence in a virtual world can become a self-sustaining, virtuous circle. Jackson stipulated that, on average, when the world reaches 700,000 members, like Club Penguin, company presences can break even: their costs to participate are balanced by incremental revenue.
However, these worlds are far “nichier” than other venues to which marketers are accustomed, so realistic expectations and planning are key. Jackson pointed out that Second Life has only 89,000 “premium” residents. In addition, expect to go up the learning curve before you can navigate and interact with others in-world. (Companies that have held job fairs, for example, have encountered significant difficulties because interviewers and interviewees struggle significantly with basic navigation). Lastly, there is growing media backlash against the worlds, and participating might have unexpected consequences for your brand.
Several major brands have made significant Second Life investments: Toyota, Sun, Nokia, IBM, Disney, Nike, Sony, Viacom and Coca-Cola. They buy in-world billboards, posters and avatars, and all have in-world locations. They host events and gain live feedback from people. Customers help them design campaigns (remember, you are among builders here, and they will go the extra mile to help you if your mission is to improve their world). Residents are influential creators whose influence goes beyond the virtual worlds. For example, Starwood is enlisting members in Second Life to help it build a luxury hotel, and members are extremely passionate about it. Sun, Cisco, IBM and Microsoft are running events and media conferences. Several corporations run recruiting campaigns.
 Virtual worlds and games can be used effectively as distribution channels for existing content, and you can use content developed in-world outside (but be careful of the context; in-world is a context that few people understand). MySpace is quite tired now but can still make a good investment (Ernest and Young and Adidas are among many that have done great things there for recruiting and community building around their brands). Regarding commerce, Second Life residents are a very attractive demographic for many marketers, and Second Life can be an excellent venue for gadget shops and things high tech. Environmentalism is often of high interest to residents.
Getting Involved: Costs and Benefits
Despite the risks, virtual worlds offer a unique opportunity for marketers to connect with customers and prospects, and Jackson laid out basic guidelines for what companies have been investing and what they have seen in terms of benefits. Benefits fall into two areas: B2B training and B2C marketing, public relations, social networks, community and C2C commerce. Investments fall into two main categories: 1) join and existing community or 2) build your own using toolkits such as MTV’s Virtual Laguna Beach. For the former, you can take out in-world advertising, run promotions, support in-world initiatives (sponsor buildings or associations), recruit, hold focus groups and build your own presence (a store, or location). Once you build a location, you have to staff it, pay rent, etc.
- A full presence typically costs $100,000-$200,000, which includes subscriptions, buying/renting land or space, a creative agency to build your space and staffing to man it. For many companies, this is a modest investment.
- A more aggressive approach is running full in-world campaigns and integrating them with online and offline activities. You can also build or buy a revenue-generating world. Coca-Cola has executed the most comprehensive Second Life campaign thus far; they have spent $1-2 million on the “Virtual Thirst.” Residents can design their own Coke machines, and there are myriad activities and promotions.
- Jackson closed with the “five steps to virtual happiness”:
- Find out what your company has done so far
- Develop the business case and measurements for success
- Based on this, decide whether to build, buy or partner
- Create and maintain your presence (the marketing golden rule certain applies here: you need a sustainable program to achieve results)
- Create a continuous feedback loop involving consumers, partners and staff
Analysis and Conclusions
 Gaming and virtual worlds are unique venues for marketers, so be prepared to think differently about the entire marketing value proposition. While traditional marketers might dismiss their paltry numbers, these worlds represent the crème de la crème of online collaboration, which offers the opportunity to understand online collaboration itself.- Most people in these worlds are creators and builders, and they are very excited about what they are creating. If your offering is introduced appropriately and respects what they are trying to accomplish, you can gain strong supporters, both “in world” and out.
- Product placement and advertising opportunities exist “in world” and “in game,” which can enable you to engage hard-to-reach demographics in a context in which they are less cynical. Many Gen X/Y are extremely jaded and cynical about mass media and advertising.
- Think about the concept of creating or participating in a virtual world or game. For many people, it represents a highly personal opportunity to “create a better place” and thus means idealism and aspiration on a large scale. To tap into the potential, think about what people are trying to accomplish and how you can help them. This is an opportunity to form a completely different kind of customer relationship.
- If you approach virtual worlds with conventional marketing thinking, you’ll be zapped and written off. Conventional markets and crass numbers-driven messages are precisely one thing people are trying to avoid by going to these worlds. There are different rules of engagement. Throw the standard metrics out the window because you’re on a different scale of risk and reward.
- Virtual worlds and gaming represent the quintessential Web 2.0 opportunity. See Web 2.0 Means Marketing 2.0.
By Christopher Rollyson Caterpillar CEO Pitches Free Trade to Business Leaders at Executives’ Club asks whether the U.S. is at turning point with global economy in the balance—A lack of courage?
 James W. Owens, Chairman and Chief Executive Officer of Caterpillar Inc., beseeched U.S. business and government leaders to find the courage to save free trade. The speaker at the Executives’ Club of Chicago’s Global Leaders Series, Owens addressed a packed house at the Hilton Chicago on 16 October 2007. His speech was immediately followed by the Club’s Technology Conference at which CIOs advised their peers on the emerging role of the CIO in the “networked economy 2.0.”
A Ph.D. economist with extensive global management experience, Owens made a very convincing argument that the U.S. and the global economy are at a turning point. It is time for the U.S. to lead by example to assure the continuance of the free trade juggernaut that has produced so much wealth in the world. If it fails, the world stands before the prospect of sharply curtailed trade.
Following a summary of his remarks, I will offer conclusions and analysis of related market developments. Although he limited his remarks to business leadership, I will also argue that the U.S.’s lack of resolve and leadership is multidimensional, notably with respect to the environment. Moreover, economic and social forces are going to confront the definition of the sovereignty of the nation state due to the collective destiny of all nations due to trade and the environment. In other words, Owens’ remarks may be far more applicable than he suggested.
By Christopher Rollyson … Risky, Loaded and Ready to Help You Improve Your Business
 The Global Human Capital Journal’s coverage of the Forrester Consumer Forum 2007 continues with this session on the disruptive power of customers’ Web 2.0 activity. Charlene Li, Vice President and Principal Analyst, Forrester Research, briefed the conference on the disruptive character of consumer empowerment, which she and Josh Bernoff call “groundswell.” She explained why customers were revolting, a “ladder of participation” to describe who is driving the change and some suggestions for turning revolt into reform.
The Global Human Capital Journal published the overall conference wrap as well as in-depth coverage of several sessions. Access all through the link to the conference logo (right). Other articles will be published in the days ahead, and we invite you to subscribe to the forum’s RSS feed to be notified as they are published.
I assume that the title’s double entendre was intentional, but in any case, it captures many marketers’ attitudes toward the so-called Web 2.0 revolution. “We don’t want our customers to change. We want to maintain our marketing models” (and control).
Charlene explained how people were coming together, who the early adopters were and how they were affecting global brands:
- Digital social technologies enable people to find each other online and collaborate. Social networks like Facebook, MySpace, LinkedIn, Orkut and intermediaries like Technorati, Google and Yahoo enable people to find each other based on common interests; moreover, they offer many defined ways for people to connect on their sites while providing privacy controls. the big change is, customers are reaching out to each other for advice on everything, including what products and services to buy. As shown in the earlier session, customers believe other customers more than experts or company employees.
- Prior to social technologies, companies controlled the means of mass communication. Today, they come across as shouting; they don’t listen to customers in ways that customers recognize.
- Charlene shared the case study of CBS and Jericho, a show that had shown some success but was subsequently cancelled when CBS put it against American Idol, and it failed to compete. The revolutionary was Shaun Daily, who asked loyal fans to let CBS know their feeling about the show by sending bags of peanuts to the president, who was buried under 20 tons! CBS put the show back on the air, but they asked loyalists to recruit new viewers, they launched a wiki to enable viewers to collaborate with staff, widgets that enabled people to invoke show content from their MySpace pages and a production blog. In short, they embraced the community and helped create vibrant collaboration with viewers.
 Then she laid out Forrester’s Framework for early adopters of social technologies, the “Ladder of Participation”: Creators are most involved because they create original content, followed by Critics (reviews, playlists), Collectors (taggers), Joiners (social networks, to be with friends), Spectators (read consumer content, blogs, videos) and Inactives (are aware but are not yet involved). See graphic right. Note the high Creator portion of Youth. Youth is currently almost double the Adult rate in every category.- She succinctly explained how to turn “revolt” into “reformation”:
- Instead of being unhappy with customers’ negative comments, enable advocates to answer them on your behalf.
- Don’t complain when customers magnify your shortcomings with product, service or other. Ask them how they would improve what they’re unhappy about, and act on it.
- Perhaps the hardest for marketers: accept that they will take your ads and messages and twist them in video, pictures, audio and text. Allow them to create relevant messages for each other. Remember, their messages refer back to yours.
- B2C-B2B connection: these trends are mirrored within the enterprise, and you can apply many of them to the company’s relationship with employees.
- Facebook penetration is skyrocketing. Charlene mentioned that 50% of all adults online are on Facebook.
- She reminded the audience that people like to hear relevant messages. She was incredulous that Ernst and Young was one of few with effective presences on Facebook and MySpace.
Analysis and Conclusions
- Consumer empowerment is a new market force. It digitizes word of mouth, arguably the most powerful and invisible determinant of customer relationships.
- Social technologies enable P2P (peer to peer, or one to one) communication observed by millions of others. Also, conversations often scale to many to many. The point is that people are more comfortable being talked with as individuals. Companies have forgotten how to do this: they communicate through corned beef hash marketing research in which customers do not recognize themselves. They provide little mirroring. Customers mirror other customers.
- Don’t solicit customer suggestions unless you are prepared to act. They already know all of your excuses.
- Charlene’s remark about people liking to hear relevant messages reflected a possible reversal between Web 1.0 (1995-2002) and Web 2.0: Web 1.0 really resisted commercial messages and mass advertising, and senior marketing executives approach it gingerly. However, Web 2.0 provides the ability to increase appropriateness and relevance. If you think about communicating with individuals rather than demographics, you can deliver messages they value. What people hate is mass advertising, the majority of which is irrelevant and interruptive.
- Keep in mind that the Boomer generation didn’t expect to be listened to because there were few opportunities to contact companies except at the retail counter, and customers had long ago traded considerate service for low prices.
- Customers are revolting because marketers are “shouting at them” and not listening. Most important, however, they can talk with each other now. They can have “conversations,” and these make company-driven communication, which addresses masses and demographics, insensitive and irrelevant by comparison. By having P2P conversations with each other, customers are raising the bar for companies’ communications.
- In many cases, customers are better qualified to help other customers to have better experiences than company employees are. Employees by definition have a company perspective on the offering, not a customer perspective. Customer advice seamlessly integrated with company expertise is paramount.
- By helping customers to advise and service each other, the enterprise can amplify the value of its expertise and provide superior experience at a lower cost. By recognizing customers’ core competency at communicating with other customers, enterprises can think about “sourcing” appropriate “services” from other customers. However, they must make it gratifying; customers do this in their spare time.
- Enterprises that develop the competency to facilitate customer-focused collaboration will dominate the economy. Their innovation will be peerless and completely sustainable.
- For more on this, see: Market Advisory: Consumer Empowerment.
By Christopher Rollyson Web 2.0 World Challenges Brands to Understand Value Propositions—Inner Human Desire Is the Keel
 The Global Human Capital Journal’s coverage of the Forrester Consumer Forum 2007 continues with this session on Playboy Enterprises’ experience with integrating social technologies into its multichannel offerings. Christie Hefner, Chairman and CEO, gave a doubly-valuable presentation because she addressed her company’s journey to online customer engagement and explained how Playboy’s transition was affecting its advertisers. It was obvious that she is a leader who rolls up her sleeves and understands her business.
The Global Human Capital Journal published the overall conference wrap as well as in-depth coverage of several sessions. Access all through the link to the conference logo. Other articles will be published in the days ahead, and we invite you to subscribe to the forum’s RSS feed to be notified as they are published.
Hefner’s advice for senior marketers was to remember that human beings are not fundamentally being changed, even though the way in which they relate and communicate may be changing dramatically. Our humanity, desires and impulses are a constant. Moreover, the value that your company offers to people must be focused on their humanity. The mechanics of how, where and when you deliver the value are crucial “implementation details.” If you are in touch with your customer’s human desires, you can see beyond the product and the technology.
Playboy has been transforming itself since the 1990s, when Hefner decided to embrace Web 1.0, and Playboy became the first major magazine with a Web presence. Changing or broadening your reach via different media requires rethinking what your value is and how you can deliver. Embracing cable in 1982 and online in 1994, Playboy has always had a significant social and community element. Understanding how your customers want to use emerging social technology to connect with your value proposition is what you need to understand.
- She opened with some eye-opening points: if MySpace were a country, it would have the sixth-largest population in the world. Fifteen percent of today’s newlyweds (U.S., I believe) meet online.
- Human impulses remain the same. Technology enables people to act on them differently. The technology may change, but the impulse is constant.
- Marketers and journalists overuse and overgeneralize the concept of “brand.” Hefner defined brand as a set of beliefs and attitude. Some of Playboy’s beliefs and approaches (dare I say “tags”?) are”freedom,” “sexy,” “fun” and “lifestyle.” It is also an adult brand. She likes to see the appearance of new magazines like Maxim because they engage younger readers and encourage them to become magazine subscribers who can “graduate” to Playboy.
- She also emphasized that Playboy has always had a strong social element. Rather than showing professional models, the focus has always been more on “normal” girls, and clubs have always had a social thread. In fact, they arose from fraternities, which organized Playboy-themed events. The company subsequently made a business out of it. She showed how the social element plays out in several media. Two of the magazine’s three most popular features are social: The Playboy Forum and the Playboy Advisor (the most popular is the Playmate Interview).
- In 1982, when Playboy moved to television (cable), management had to reexamine everything and get in touch with what their business really was. They had to reexamine the brand (abstract away from the business and get to the idea). Social networks demand a similar treatment. In 1994, they moved online and pitched the offering primarily to couples, not “lonely guys,” as Hefner wryly put it. Thus far, online was the most transformative for Playboy (because it was interactive). It broke the media template of “one to many.” It introduced “small D democracy” of content.
- In general, social technologies can serve to diminish the authority of large organizations. She gave the example of healthcare, in which people habitually informs him/herself online and connects with other people with similar conditions. It’s no longer just listening to the doctor. This makes markets far more dynamic.
- Many people fear that online social technologies will throw marketers a curve by removing the human element, but Hefner sees the opposite. Referencing Nesbitt’s “High Tech, High Touch” principle, she gave the example of the resurgence of Playboy clubs around the world. People like to connect with other people in the physical space as well as online. The two are complementary.
- Playboy’s view of social technologies is that by understanding your value proposition (and brand), you can have authority (if you resonate with customers). You can marry this with customer participation. For example, online (members) select Cybergirls, some of whom subsequently appear in the magazine. Playboy has contests on campus in which members vote to select the best-dressed.
- Playboy is investing in a space on Second Life, and the value currently lies in understanding how virtual worlds will affect entertainment as a whole. It’s a laboratory. Virtual worlds also project the brand, which is a key strategy for Playboy.
- PlayboyU is a social networking site that recently launched. Members must have “.edu” email addresses, and it enables members to generate content for Playboy Radio and TV. The company really believes in embracing consumer content and integrating it with its content.
- Critical to success is thinking holistically and breaking down silos. She stressed that media companies have well defined silos that (usually) do not serve the customer anymore.
- Playboy is a global brand as were the companies represented in the audience. Marketers ask themselves what they can learn from abroad.
- Mistakes: do not assume that you know what your customer wants. PlayboyU is evolving quickly based on customer interaction. Customers get mobilized when they know you are open to listening. “We foster something of value. We want them to use it,” Hefner commented.
- As far as managing content and offerings, Playboy has always had some free content, which enables prospects to discover the brand. Content does not have to be free. Playboy aggressively prosecutes piracy, but Hefner stressed that “you want people to rip you off some.” If your content is good and relevant, people will use it. You have to keep a perspective.
- Some surprising revelations: of Playboy’s $1 billion apparel business, 75% of customers are women. Roughly 40% are from EMEA (Europe Middle East Africa), 40% Asia Pacific and 20% USA.
- Advertisers especially value Playboy’s ability to reach people across media, and Hefner sees their business trending this way even more in the years ahead. The days of people buying the magazine only are admonishing rapidly. Instead, they are moving to a “brand hub,” and they strive to expand the brand’s footprint. They have a global perspective.
- On a humorous note, when asked by an audience member how to convince 50-something management that the media business was changing, Hefner advised to bury them with too-ample evidence that customers were in control. If they still don’t get it, “Shop your resume.”
Analysis and Conclusions
- Picking up on Hefner’s theme of not assuming you know customers’ desires: you no longer have to. Approach everything as being “in beta” because you can listen to your customer and adjust offerings. It is now economically feasible to listen to and interact with customers because digital communications are easier to work with (than analog) and relatively inexpensive.
- If you are in touch with your customers’ human desires, you can see beyond the product and the technology.
- Hefner echoed the mantra at Digital Hollywood: make content available how, when and where the customer wants. The distribution medium (i.e. TV, radio, podcast, print) matters less and less.
By Christopher Rollyson Social Computing at an Inflection Point—Preparing to Be Overwhelmed
The Global Human Capital Journal’s coverage of the Forrester Consumer Forum 2007 continues with this session on Delta’s experience with customer blogs. Moderator Henry H. Harteveldt did an excellent job setting up the session and letting Laura R. Hunnicutt, Delta’s General Manager of Customer Experience, talk with the audience about some real-world practical problems of moving executives’ legacy thinking to Web 2.0. Having enterprise visionaries and thought leaders added tremendous value to the conference.
The Global Human Capital Journal published the overall conference wrap and will have several other in-depth articles in the days ahead. You can be notified as to their publication by subscribing to the forum’s RSS feed.
This session showed that social computing can have a powerful strategic impact at inflection points in companies’ histories. As everyone knows, Delta is recently out of bankruptcy, and the airline business is difficult on a good day. The company is in a period of high risk-high reward, and Laura gave the audience a heartfelt behind-the-scenes look at the company’s Web 2.0 efforts. Part of the way through the session, she invoked Delta’s social computing guru, Jacob Morris, who added some insights:
- Critical to succeeding with social computing is to have the right leader. Jacob uses a mentoring approach, and he understands both the medium and the company. It’s about moving things along as fast as possible while recognizing the limitations of the existing culture.
- Stop overprotecting the brand! (Reading between the lines, I believe she intended to say that the company doesn’t own its brand outright anyway; it shares it with the community and customers).
- When you launch blogs that feature customer input, prepare to be overwhelmed. You will be. Make time to deal with it. You have to participate and respond to customers. (In my experience, if you fail in this, you’ll be worse off than if you had never launched it). Direct, visible customer communications (via blogs) is a long-term commitment.
- In terms of the number of comments, Delta averages five to twenty comments daily. Employees from delta.com always respond the same day. Of the people who write, it runs the gamut, but Delta loyalists are well represented.
- Opening up and participating in customer conversations can be an excellent driver to foster corporate culture change. It will facilitate transformation. For Delta, it can help us to be more transparent, human and caring. It’s bottom-up.
- It wasn’t easy to convince executives to do launch social sites. They pressed for a value proposition. Why do it? To their credit, Delta’s agency kept telling them that they had to do it to show their leadership. It would sync with “the new Delta” branding in place since emerging from bankruptcy this spring. All the same, it took months to convince senior management. Marketing and delta.com were very supportive, and Corporate Communications was lukewarm. Other areas were not very understanding.
- Surprisingly, Legal was supportive (she had been dreading that meeting). The legal guy had had experience with social computing, and he wasn’t afraid.
- At this point, Delta has no “Facebook plans” and one of their agency’s Twitter experiences didn’t add value.
- In general, there is a big generation gap, and it is difficult to communicate the importance to older executives. But you can’t give up; you have to keep educating and showing them the importance of being a part of it. It doesn’t solve everything. You have to assuage fear at the executive level. Motivate executives to blog, so they can being to understand from their own experience.
- In response to a question about what insights have Delta has gained from “the customer conversation,” Laura said that maybe five percent of suggestions are really “out of the box.” 95% reflects what we already hear through other channels. We read everything and take everything very seriously. Thus far, customer comments haven’t had much impact on the improvements in the project pipeline (because they aren’t hearing about many unique issues), but they can help us to reprioritize projects in the pipeline.
- Metrics? Brand development is hard to measure. You have to take a long-term view.
- The resource impact is not huge at this point. Thus far, we have done it with internal resources. We have dedicated one product manager, one moderator and an outside firm to moderate after hours.
- In one humorous exchange during Q&A, someone asked Laura about transparency vs. “translucency” (partial transparency). She said that, with respect to Web 2.0, there was no middle ground.
Analysis and Conclusions
- I admire Delta for having the vision to make social computing a part of its effort to redefine itself. They correctly recognize that they are at an inflection point, and adopting social computing can send a powerful message to customers. If they do it right, they will allow customers to adopt their airline as theirs. That can enable them to add value in a completely new dimension, away from price. Similar stories are easy to find: JetBlue, Southwest. Yes, some of their value is due to economic and organizational advantages, but getting customers to spend an extra portion above the price of the cheapest ticket may be closer than they think if they let customers know that Delta is their airline. I don’t mean more frequently flyer points: transparency , humanity and accountability will be much more differentiating for many people.
- From my experience, the information that Delta is getting from customer comments through the blog is not the important thing. It’s the process that is the unique Web 2.0 value-add: customers can write what they want and be heard by Delta and by other customers. They can give part of themselves to the conversation, thereby making Delta their company. Being on a (digital) stage with the company and sharing thoughts with other customers and the company is the magic sauce. When customers write letters, they receive a courteous blah blah letters in response, and maybe a coupon. They don’t feel heard. What can the president say? Customers want emotional satisfaction (be heard and responded to)—and often responses by other customers are more fulfilling than those by the company. Or, being responded to in a public forum can be very gratifying.
- When customers feel that they own a forum, they care about it. If you do it right, you can encourage customers to help each other. When a customer helps another customer, that action is satisfying in itself. Too many executives do not believe that customers will help each other because they can’t see the emotional gratification that customers get from helping others (executives are too focused on economics). Helping and being recognized is a human need, and it’s too often difficult to do at work or within family dynamics, so doing it online can be the highlight of someone’s day.
- Laura’s comment about “bottom up” process and caring hit a chord with me. As I’ve written extensively, in the Industrial Economy, companies increased competitiveness largely through efficiency and economies of scale. In the Knowledge Economy, efficiency is taken for granted and companies differentiate through social networks and innovation. In the Industrial Economy, efficiency-creating silos were revered at first, then tolerated. People were more flexible that company processes, so they had to accept the company’s limitations. For employees, this was difficult because they often had to subjugate their humanity for process. Social technologies will enable companies to become more human because processes are becoming more flexible, and humanity will increasingly be prized as a differentiator.
- The importance of choosing the right leaders for high-risk, high-reward initiatives can’t be overstated. Jacob is an excellent mentor, and Laura also has the right stuff: her obvious commitment and caring for the company and customers were palpable. At one point, she reflected that she felt so lucky to have a job that she loved so much.
- On “being a part of it” (the social computing change), as Laura put it, companies can’t avoid it anyway. The world is changing around them. Executives’ only choice is how and when they want their companies to relate to it.
By Christopher Rollyson Dell and Procter & Gamble Innovation Leaders Share Web 2.0 Transformation Insight—The Slow Boil
The Global Human Capital Journal’s coverage of the Forrester Consumer Forum 2007 continues with this session on what I’ll hazard to call Innovation 2.0 ,^). David Armano of Critical Mass moderated this an infectious session. It was clear that Proctor & Gamble’s Stan Joosten and Dell’s Manish Mehta had been in the innovation trenches, and their comments were extremely valuable.
A key ingredient to Web 2.0’s transformational potential is that the technology is an order of magnitude more explicit, easy to use and less costly. It’s possible, and desirable in many cases, to take small steps. On the other hand, Dell took a risky step in launching Direct to Dell in the midst of serious customer service problems, and it leveraged blogs to turn the situation around.
The Global Human Capital Journal published the overall conference wrap as well as in-depth coverage of several sessions. Access all through the link to the conference logo (right). Other articles will be published in the days ahead, and we invite you to subscribe to the forum’s RSS feed to be notified as they are published.
The Meaning of “Always in Beta”
- Manish: you have to escape “corporate terminal velocity”; if you innovation about 3 times faster than the enterprise can absorb, that’s an optimal speed. To do this, the enterprise must create a special space in which people can operate differently. When you select an “innovation” to incorporate into the enterprise, you often have to adjust it (so that it’s appropriate for enterprise speed). When he was saying this, I thought about deep sea diving; you have to come up slowly to avoid “the bends.”
- Stan: you are never finished. The landscape is always changing, and start-ups are always introducing new possibilities, from undefined spaces. YouTube, Twitter.
Approach to Innovation
- Stan: innovation is a core strategy at P&G. Most people think of us as a consumer product company, but innovation goes beyond products. We seek to innovate around products, to services (and how consumers use them in their lives). Our CMO wants marketing to add value to products. Marketing has been the same old thing forever. Our vision is to actually add value to the product. We have premium brands, and innovation is part of our promise. Innovate everywhere. Also, we have a mandate to source 50% of innovation from outside P&G. We already crowdsource (chemical) engineering, and we intend to do it with marketing.
- Manish: Dell approaches innovation by incubating ideas inside the company. The social media space—RSS, Twitter—is enabling motivated, passionate people to emerge and come together. Passionate people are our secret sauce. Dell Online has a partnership with Corporate Communications; we are willing to take risks. A (critical success factor) in innovation is finding the passionate people within the organization.
- Stan: (as to whether your company should use blogs, wikis and the other enterprise 2.0 tools) Gen Y comes in and says, “Why isn’t it here?” (This is how we work). We have to educate executives and let people do it. Our blogs started on a $1,500 old server. Now we have 200 blogs, and we spend zero on promoting blogging. The blog site is now the hottest intranet site (in the company). Go do it. Innovation is contagious.
How to Measure Innovation’s ROI
- Manish: Michael Dell wanted us to do it (their version of “damn the ROI, full speed ahead”). You have to create the culture inside to deal with the outside. In general, Dell is very ROI-driven, but we’ve kept ROI off the table for the time being. Innovation can show sentiment changing. For example, negative comments about Dell are falling. (Even though we can’t put a price on that, we know it’s valuable).
- Stan: P&G is very data driven, and ROI type measurements are very appropriate for stable processes. If your process isn’t stable (as is the case for emerging activities and developments), ROI isn’t relevant. You need results, like when your numbers go up (but you don’t have to monetize them to the cent). You can get away with this when you organize innovation into small chunks. (If you have big ticket items, that will put pressure to show a financial return.) Innovation is the biggest strategic idea.
- David: Critical Mass has seen value from its “thought prototyping” process on its sites (blog and wiki functionality).
How to Warm Senior Marketers to (Discontinuous) Innovation
- Manish: most marketers are not ready for open innovation. When we put up (Direct to Dell), it had 1.3 million members (and a high portion of negative comments). He almost got fired. (marketers got extremely upset, but he had support from the top, and numbers of negative comments are dropping significantly; everyone can see the progress).
- Stan: People are commenting negatively anyway. It’s better to be in contact with what’s really happening. Be aware of the intent.
Admired Companies
- Stan: Dove, what they’ve been doing with the “real beauty” campaign. Dell for their risk-taking.
- Manish: Apple for their design.
On Mistakes and Failure
- Stan: the worst mistake with innovation is when we don’t let go of control. With innovation, you have to let people learn. (Innovation is) a different learning process.
- Karl Long of Nokia (during Q&A): a big issue is, how do you give permission to fail (in a highly competitive company)?
- Manish: you must allow innovation to fail. We think about keeping it within a usable sweet spot. If you innovate 5 times faster than the enterprise can absorb, you’re wasting effort. (And, if you’re innovating at the speed of the enterprise, you’re not innovating).
- Stan: all this depends on your definition of failure. Business results are derived from stable processes. You have to put innovation in another category (because it’s discontinuous). Chunk it and don’t spend so much in one place.
Analysis and Conclusions
- Web 2.0 is a very innovative proposition, and speakers captured it extremely well. It’s transformational, but it’s not a “big ticket tech item.” This risk is not in terms of cost, but rather it is about collaborating with new parties (sharing control with customers). Blogs and wikis enable emergent organization, yet the software is abstracted enough to deal with it. Web 2.0 tools are very inexpensive compared to “enterprise solutions.”
- The biggest thing in the market for 2008 will be tagging. People, following a discontinuous process that enables them to work at the lowest transaction cost, will organize everything with tags.
- By having small chunks, you can diminish the pressure to submit to ROI type metrics. This is simple yet profound.
- It may not sound like much, but it’s a pearl: innovation is not a continuous process, so don’t treat it like one. Stan’s advice was sound, in my experience: keep investments low, but don’t burden with ROI-type metrics. It’s a different category. That doesn’t mean you can be irresponsible.
- I loved Manish’s metaphor of “corporate terminal velocity“: you have to keep innovation within the window of applicability, but also have an open mind about “applicability.” P&G has the right idea by thinking outside the product and not restricting innovation to the product: as I’ve written for years, value will be created in terms of customer experience. Products and services are, in the end, only means to better experience.
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