The Forbes website posted a very short story about Angela Ahrendts, exiting as the CEO of Burberry to head up Apple’s retail operations. If you thought Apple had broken a lot of ground in technology retailing already, hang on.
You might remember Ahrendts as the pretty, stylish, and all business-gravelly voiced guest on stage with Marc Benioff during recent Dreamforce extravaganzas. Her face was plastered on a wall of the Moscone Center too. Ahrendts took on Salesforce and its social approaches to all things related to customers and transformed Burberry stores around the world to the point that the iconic fashion brand also became the hip tech retailer inserting technology and information into the customer experience.
The result has been a shopping experience that puts the customer into a mindset that envisions the experience of ownership and that’s a long way from simply having a great shopping experience. Hey, if you’re shopping at Burberry’s you are going to spoil yourself so the shopping part of the experience hardly needs work.
So, Ahrendts will presumably bring her avant guard retailing savvy to Apple and perhaps help transform it further from purveyor of consumer technology to one that helps customers make a statement about themselves through their technology choices. Maybe she’ll even upgrade the geeky T-shirts the staff wear.
That’s a smart move for Apple. Given the recent activity in wearable technology such as the watch (for which Apple owns the trademark on iWatch) fashion might be the next tech battleground. The only question in my mind is what role Salesforce might play in this configuration.
There was an interesting article in the January 2012 edition of Vanity Fair a magazine I’ve come to enjoy though for many years regarded as another of those things my wife would like more than me. But VF carries an interesting blend of current events and politics as well as the glossy pictures and stories of pop culture icons that seem to be necessary to sell a magazine these days.
I say necessary but for the exception of the New Yorker. How those people continuously pump out the level of quality journalism that they do, on a weekly basis, always amazes me. Malcolm Gladwell and James Surowiecki write for the New Yorker even after several books each and strong public speaking careers. That magazine has a formula that is no longer being emulated, I fear.
At any rate, the VF article is from the issue with Lady Gaga on the cover, and is titled “You Say You Want a Devolution?” It’s about the apparent ossification of American culture over the last couple of decades or a bit more — roughly the span of time that I have tried to be an adult. The article’s main point is that we’ve made precious little progress in style, design and culture in that time. One hypothesis is that our creative juices have been consumed by the tech revolution.
Internet, WiFi, social media, video, audio, telephony all running through the gadget plus DVDs and a long list of other inventions that weren’t readily available or even invented two or three decades ago have consumed that part of our waking hours that other generations dedicated to style and culture. For emphasis, the article asks us to ponder pictures of street scenes from various decades. If you did this you could easily discern the difference between the 1960s and, say, the 40’s, but the 90’s and today? Not so much.
Not long ago I suggested that straight-line extrapolation from the present to some point in the future is not very good but it is what we often settle for when forecasting. VF seems to be telling us that lately the straight line is fine. But here’s the kicker, straight lines work best within a paradigm. If you can identify the paradigm then maybe you can reconnoiter and find your place a few pages forward. If you are transitioning paradigms all bets are off.
I don’t think 2012 will be like what came before. I think ’12 will be the beginning of a new paradigm and I have no data to support this idea other than the knowledge that paradigm shifts, like unexpected guests for the holidays, don’t warn you that they’re coming.
So, what’s in store for ’12? Well, we’ve been in a quasi recession for almost four years, unemployment is stubbornly high and in case you’ve been napping all this time, ’12 is a leap year, I mean, an election year. If there’s one thing that galvanizes politicos of all stripes it’s an election and while everyone in Washington might hate everyone else’s guts, there will be enough collaboration to cobble together enough votes to do something about the economy. That means a few more jobs and more meaningful growth than has been the norm lately. Perhaps there will even be an extra bowel of gruel for us ninety-niners.
So I look for a bounce in economic activity, that’s the easy part. What’s harder is figuring out where the bounce happens. I watch fuel prices and note the relationship between them and economic activity. Low prices correlate with slack demand but goose the economy and watch the price of benchmark crudes like West Texas Intermediate and Brent go north.
Note: I am not advising you to buy or trade crude oil or to do anything else investment wise with this analysis.
But if crude does go north companies that want to catch the economic rise will need to be smart about keeping carbon out of their business processes. That means conventional business — Dare we say business as usual? — breaks down and that is where the new paradigm comes in. Smart companies will be cranking up all the front office tools and social ideas they’ve accumulated over the last five or ten years and realize that a lot of it fits together and changes life as they know it.
The fit drives more frictionless business that naturally reduces reliance on face-to-face meetings and all the travel and expense that goes along with it. I am not simply saying that we’ll simply substitute a social encounter for the physical equivalent and be done, though we will. But the actual need for some of those more elaborate interactions will simply evaporate as we use social and other technologies to know more in the first place.
Marc Benioff is fond of quoting some of his company’s data concerning Chatter, one of its social media tools, and I don’t remember the exact numbers but they include categories like reductions in email, meetings, phone calls and more and the reductions are significant. The information people need and that they’ve historically received through these older sources has been rendered in a more available and efficient format through social media. This has yielded a new term in the industry, the social enterprise, and it typifies the paradigm shift that I am talking about.
The social enterprise is not limited to a few startups at Routes 92 and 101 south of San Francisco. We saw companies like GE Capital, Burberry and Toyota drinking the lemonade in 2011 and ’12 will be the year they start to show results. 2012 will also be the year that middle adopters and laggards in general wonder why they aren’t feeling the warmth of the recovery and this will be their answer and motivation.
We’re fond of saying that the economy turns about every ten years and we are also fond of remembering that the year of the network actually took a decade to be realized. These are not contradictory. Networking’s early adopters got value right away from their investments but the economy made a dramatic turn once networking got to critical mass and I think we’re in an analogous situation with social technologies.
We’ve been messing around with social for a long time but two important threads are being woven together. Technological dispersal and personal understanding of the technologies is meeting economic demand for better, faster and cheaper ways to do business in an era of limits. That is what’s driving the new paradigm.
We might have to wait a bit longer to get new hairstyles, music genres and fashions but I think the thing that’s driven us in the tech era (innovation) is a live and well and we’ll see plenty of it in the new year. Who knows? I could even be right.
I was sitting in the “blogpound” at Cloudforce New York, the seating area where Salesforce.com considerately places press, analysts and bloggers along with tables, power and Wi-Fi, when it dawned on me. Despite all the articles, blogs and books (and Paul Greenberg’s ceaseless public speaking) dedicated to the social media phenomenon in CRM, we may have been under reporting its importance all this time.
It’s hard to say or believe this, I admit, but look at some of the evidence. We’ve all generally agreed that social represents a major disruption in business but somehow it seems even bigger than other disruptions. While those other disruptions were legitimate, they left the business world more or less intact. Client-server replaced mainframes and we got a few more application types (like CRM) but business went on. The same can be said for the Internet revolution and even the mobility upswing.
These all made business move a bit faster but it was still business as usual. Brian Solis published a very good book recently called “The End of Business As Usual”
In all those cases the same application types survived into the next generation to be built upon and extended. But social represents a break that is not limited to computing or hardware alone. Social is a bigger break because it goes to the heart of how a business operates, what it does and even what is considered its secret sauce.
It used to be that the secret sauce was a patented product or process that you built a business model around to protect. That often meant controlling information flows between your company and your customer. Your company was the sole source of the product or service as well as being the sole source of truth about it. That’s been gone since the Internet boom started but companies have nonetheless been able to operate, though somewhat hobbled, in their old models. But not much longer.
Cloudforce, New York, made it official. With the rather low key introduction of the Social Marketing Cloud Salesforce has completed at least the rough outline of the social enterprise — a term used by CEO Marc Benioff lately and one that you’ll need to get used to. Here are some reasons for my thinking this.
At the press conference just after his keynote, Benioff told us that the attendee list for the event had multiple instances of companies sending anywhere from 20 to 50 employees to the event. You do that kind of thing when you are marshalling resources and implementing a plan. In this case the plan is about how to pivot the business to become a social enterprise.
That’s not all. There were significant early adopter examples on display at the event. Angela Ahrendts, CEO of Burberry, has a vision of making her company a social enterprise and is using the Salesforce suite of solutions to get there. She spoke live with Benioff during the keynote but perhaps more informative was a two-minute video in which she said — of becoming a social enterprise — “If you don’t do that I don’t know what your business model is in five years.”
There was also a conversation with the head of GE Capital that provided a similar moment. But the show stealer was the video of Toyota’s CEO, Akio Toyoda, in Japanese with subtitles in which he said, “This has changed my life.”
So from all indications the early adopters are on board and they are influencing other early adopters and in the next year you can figure the early majority will come along.
This disruption will be incredibly fast as this sort of thing goes. Unlike the decade long march from standalone computing to networks I think, given Ahrendts’ timeline, the next several years will see a great deal of activity as big and not so big companies scramble to get to the new, new thing. There is a growing sense that there isn’t a lot of choice in the matter and when there isn’t a lot of choice there isn’t a lot of time either.
All this is good for the economy. Every recession needs a new idea to drag it out of the trough and reignite growth. The social enterprise is that thing and not simply for the obvious reasons that I’ve mentioned already. Social enterprises should be able to operate far more efficiently using less inputs for the same or greater output. That will be a critical driver in adoption as companies constrained by the ongoing credit crisis learn how to do more with less capital.
What’s most interesting to me is that Salesforce has found a way to preserve its differentiation in a marketplace that has exerted itself to catch up with its cloud computing innovations over the last decade. All other CRM, and let’s say major software companies, have developed cloud offerings that mimic the basics that Salesforce pioneered — hosted applications operating in weightless browser interfaces. Some have even made inroads in social computing.
But most have stopped short of multi-tenancy preserving the data center model by simply moving it to the sky. Microsoft executives recently told me that keeping data separate was the only serious way to handle the stuff but they didn’t tell me why. I wonder if it’s radioactive; perhaps it is or maybe it’s simply toxic to the old paradigm.
With its emphasis on the social enterprise, Salesforce preserves its blue ocean strategy as its competition is still locked in an old paradigm. Benioff told us the company will do three billion dollars in revenue in its next fiscal year on its way to a goal of being the fastest to ten billion in history. For reference, in 2011 Seaboard was number 500 on the Fortune 500 list with revenues of $4.385 billion.
You know what I’m talking about?