June, 2011

  • June 29, 2011
  • There’s a huge difference between the enterprise world and the social media community.  While there are many signs of life on the social side, the rank and file global one thousand seem for the most part to be clueless.  That’s not an indictment, just a statement of fact and maybe opportunity.

    At the Enterprise 2.0 conference in Boston last week I got an eyeful of the reality.  It’s still very early in this market’s evolution.  The vendors are all lined up including the small innovators and the big companies looking to cash in by being fast followers.  But what’s missing is the numbers of interested companies ready to be saved by the new solutions, a.k.a. customers.  I haven’t witnessed the beginnings of a land rush for social technologies in the big companies that will ensure its success.

    Perhaps everyone is tired and cautious after witnessing in rapid succession the rollouts of enterprise ERP and CRM.  They were both large-scale infrastructure plays that were as necessary to modern business as they were painful to implement.  A few weeks back I posted an article comparing the growth in U.S. GDP and the rise of the information age.  From a baseline of $1.6 trillion in 1975 the GDP has steadily risen to over $14 trillion today.  Other regions of the world have seen similar expansions.

    If it’s not institutional memory holding the market back — and holding back may be too strong a phrase — it could be that people in the enterprise just don’t understand in sufficient numbers yet the only thing that counts.  Maybe too few people see a way for social technologies to help them make money.  The halls of the Enterprise 2.0 conference were not exactly jammed with pioneers and pilgrims trying to get wise.  But don’t get the wrong idea, the show was in a big place and it was well enough attended to call it a success.  All I am saying is that the stampede has not yet started.

    So what will it take for the avalanche to begin?

    For a long time I’ve been harping on the challenges all companies face in demographic changes and most importantly transportation costs.  As we discover that fuel price fluctuations will adversely affect business we might see greater adoption of social strategies in the biggest companies.

    But that’s asking a lot, here’s why.  Back in May, I was in Chicago for a speech and I noted the high cost of gasoline.  It was approaching five dollars and at the time people were mad about high prices all over the country.  Since then, prices have eased and in many places gas is a relative bargain at less than four dollars.  A few years ago three dollars and change didn’t seem like a bargain but it shows what you can accommodate.

    Now, this isn’t good news for a couple of reasons.  First, fuel prices mirror economic activity.  When prices are on the rise, it’s because demand is higher due to increased economic activity.  The reverse is also true but it can take many months for the effects to be fully realized as an economic downturn.  This latency is a big problem because it separates cause and effect in many people’s minds.  As fuel prices fall we reap a temporary gain and think that things are returning to normal but we may fail to notice the country simultaneously slip back into recession.  I am not forecasting this, but it’s on my mind.

     

    The second reason for concern is that fuels are transitioning from a cheap commodity to a scarce and expensive one.  Traditionally when this happens there’s a round of inflation and the market adjusts by bringing more supply to bear.  As I’ve written before, that’s not happening.  According to the IEA, global demand is about 90 million barrels per day (mbpd) and supply is 88 mbpd enough of a shortfall to cause the price tightness we see.  Instability in some regions is no help either.  Fuel is becoming more expensive in an absolute sense and that affects business from raw materials to travel.  In a situation where supply is limited a round of inflation will simply breed another round of inflation and in short order, stagnation.

    Alternatives include various transportation substitutes including smaller cars, less flying, bio-fuels, trains and electric cars.  All of these require at least some modest change to infrastructure, which is expensive and will take many years.  On the other hand, the Internet is an already built infrastructure and social media is well developed and understood and can fill in for at least some of the transportation demand by making us more attuned to customers and more responsive to them.

    As the transportation issue unfolds it might prove to be the driver that enterprises need to begin thinking outside of their boxes.  It’s going to take a lot because we’re not simply talking about adopting a new technology, we’re talking about changing out a hierarchical management structure that goes back to the industrial revolution for something that is distributed, inclusive and very twenty-first century.  For some companies that will make implementing ERP and CRM look like child’s play.

    Published: 13 years ago


    I trade business cards like I traded baseball cards before the designated hitter and division play.  So I get to see the broad diversity in how people arrange their information for public consumption.

    There isn’t much under the sun that you can do differently with cards these days and for many companies — like mine — they are the only thing that actually gets committed to cellulose.  So it takes a lot for me to comment on something as mundane as the business card but something occurred to me this week that got my attention.

    At the Enterprise 2.0 conference in Boston, I noticed that some companies were omitting some of their usual business card information.  One card in particular that I received had no phone number, just some social and email contact stuff.  Someone informed me this was a new thing.  After years of adding various social handles and extending printing to both sides of the card, a small minority of companies has begun removing vital information like phone numbers.

    Perhaps this is simply a way for a social company to eat its own dog food or to encourage me to do likewise, but I don’t like it.  It seems like a form of self-mutilation.  Removing information, making yourself harder to do business with is no formula for success.  In a world of less is more, this less is less.

    I have no problem with people attaching additional information like those funky square bar code-like things that I don’t even know the name of.  But taking information away — especially when it’s human readable — makes no sense.  So if this is a new trend, in all sincerity, stop it right now.  Please.

    Published: 13 years ago


    Enterprise 2.0 came to Boston this week and it provided an interesting snapshot of an emerging market.  At the same time Deloitte and the National Venture Capital Association (NVCA) released a study that calls for a more robust IPO market.  I see connections.

    First, E2.0 as it is abbreviated, made its annual visit to Boston.  The show is gaining momentum and with it the paired ideas of the social customer and, I hope, the social enterprise.  E2.0 moved out of a big hotel and fit comfortably into the Hynes Convention Center where there is room to expand over the next several years.  There are also many more places to hold after parties in the new location, something that many vendors and analysts took full advantage of.

    E2.0 is the leading edge, the point of the social spear.  It is the place where people of a certain mindset go to share big ideas about the future of business but it wasn’t that well attended.  I thought more people representing more companies wanting to get on with socializing their businesses would attend but I was wrong.  I chalk it up to social being still in its early days.

    There were not enough customers telling their success stories and too many vendors attempting to be neutral thought leaders, which I don’t think worked.  And ironically for a social show, the big established vendors of everything technology related made their best old school attempts to own the space.

    IBM emitted a press release with this headline: “IBM Named Worldwide Marketshare Leader in Social Software for Business”.  The PR contained this: “IBM social software including IBM Connections provides tools such as communities, forums, wikis and blogs and new capabilities like advanced special analytics, enabling users to expand their network with recommendations of people to connect with based on prior connections and similar interests.”  It was only missing a concluding, “You all can go home now, we’ve got this.”

    But in fact, no one has this and no one probably will for a few years.  The thing I find odd is that there was little discussion of the need for the enterprise to change, to morph from a hierarchy to a community, to become social.  It felt like the only thing the big guys were concerned with was corralling the social customer while leaving the hierarchy intact.  Good luck with that one.

    Conspicuously absent from the festivities was Salesforce.com a company with as much to say about the social enterprise as anyone.  But it seems like Salesforce only goes to its own shows where it can be the star and control the message.  That will work in this market’s earliest days but if Benioff, Inc. wants to capture the vast social enterprise market they’re going to have to start coming to some of these events.

    I think Salesforce has a good message as evidenced by the company’s Cloudforce event last week.  They’re talking about the social enterprise and the social customer in ways that the others are not.  The others, IBM and company, are still proselytizing about their technology while Salesforce is relentlessly pushing a message of empowerment, of how to be better at what you do through the use of social technology.  That’s what I thought was missing from E2.0.  I didn’t get to all the sessions but I spoke with a lot of vendors and some, especially the smaller guys like, Clearvale (BroadVision) and Saba and very small guys like Yammer and DoubleDutch each in their own ways gets it and is pushing the ball toward the goal line.

    Future editions of E2.0 need to sell that new religion and it might be helpful if they reduced the number of shows to one per year rather than the current East and West approach.  I might suggest turning one of those into a virtual event to showcase another part of the social revolution.  The show’s got to start eating its own dog food.

    In a related matter, the NVCA issued a report that takes a polite shot at the financial community by pointing out the obvious.  The financial meltdown of a couple of years ago still emits a kind of financial cosmic background radiation which has made IPO activity difficult and since the IPO is essential to a healthy venture industry, the industry has a bit of a cold.  From the release:

    “Clearly the industry continues to feel the ripple effects of the global economic downturn — most notably in the form of limited exit opportunities,” said Mark Jensen, partner, Deloitte & Touche LLP and national managing partner for venture capital services. “However, with signs of improvement in the economy and easing of the liquidity crisis, the tide may be turning.  Innovation continues to be an important driver in our economic health and a strong exit marketplace is critical to the venture capital ecosystem driving much of that innovation.”

    Low IPO activity means it’s harder to raise funds and for investors to take on risk if there’s limited upside.  That’s too bad because when you think about it, the hundreds of billions of dollars that have been invested in the last thirty-five years have generated many tens of trillions of dollars worth of business activity.  As I wrote in a recent post, building the information economy has driven U.S. GDP from $1.6 trillion in 1975 to over $14 trillion today.  That effect has been mirrored all over the world.  So while it might seem like the venture industry is a remote part of our lives, it’s critical to our well-being.  I take this report very seriously.

    No doubt some new investment is flowing into social technology vendors but the amounts are still small and judging by the number of booths at E2.0 there aren’t enough new companies dipping a toe in the water.  Disclaimer — I am not giving financial advice here.

    Still, what I gave seen in the last couple of weeks with E2.0 and Cloudforce suggests an early stage market with some good ideas that has yet to catch fire.  There’s a core group of vendors and influencers who get it, some of whom might be a bit too enthusiastic but that goes with the times.  To me it’s a no-brainer to keep at it, we’re mostly on the right track but we need to find new ways to attract large companies to this new approach to business.

    Published: 13 years ago


    Last week Marc Benioff was in Boston with another regional Cloudforce tour event and Stephen Denning has written a good book.  There is a connection between them.

    The day after the Boston Bruins clinched the Stanley Cup, Benioff was in Boston and thank goodness the company decided on a noon start time or more than one thousand bleary-eyed Bruins fans might have had second thoughts about attending.  Not to worry, there was an overflow crowd for what looked to me like a preview of Dreamforce — coming up at the end of the summer.

    Benioff was ebullient, though it probably had nothing to do with being a Bruins fan and having waited 39 years for THE CUP to return to Boston.  Amidst all the talk about clouds and forces Benioff let out a quip that was revealing, signaling a shift in at least the company and most likely the industry.  I will have to paraphrase here, but it went like this: We started out as a hosted service company but we’re now all about social.  If you’re not in the cloud, we can’t wait for you.

    Now, in print that might seem harsh but it was done with humor and the crowd of converts certainly understood it.  Translation: the next big move in the front office is social — we’ve been preparing for it for the last couple of years and now it’s time to roll.

    To back up his point, Benioff unveiled new messaging that I expect will be with us for a while — the social customer and the social enterprise.  Now, neither one of these terms is new or original to Salesforce but true to form, Salesforce is adopting them and giving them specific meaning.  One new idea they are crisply communicating is the manifold relationships one can have with a vendor, all of which need to be arbitrated in some way by social technology.

    There’s the obvious customer-company relationship, but also the customer-to-brand relationship and customer-customer relationships all mediated by some form of social media.  The social enterprise must have strategies for each.

    While we‘re on the subject let me nominate some shorthand for this brave new world.  The customer-to-company relationship is now C2C — note I am not designating this as customer-to-vendor because vendor has been split into company and brand for good reasons.  Customer-to-brand is now therefore C2B.  Now what does that do for the customer-to-customer relationship since C2C is taken?  I recommend CC since customers effectively cc others whenever they use social media anyway.

    Ok, back to the social enterprise.  The Salesforce vision is important because the CC social revolution is moving the C2C and C2B relationships from hierarchical to relational and social tools are the things companies need to get the job done. Got it? C2C and C2B might become the business end of VRM (vendor relationship management), I think.

    In his recent book, “The Leader’s Guide to Radical Management,” Stephen Denning explores the new world that will need these social tools.  In Denning’s well written and informative book, a company’s mission is to delight its customers by making and delivering products and services, not simply provide adequacy in one direction and profits in the other.

    Denning gives several pages to Salesforce connecting his vision and Benioff’s.  In this view is that should operate pretty much the way Salesforce’s cloud offerings do, especially Chatter, the Salesforce collaboration tool that enables ad hoc teams of people inside a company to spot problems and opportunities and take action to help customers and hopefully delight them.

    One of the only criticisms I have of all this is the way Salesforce describes the effort it enables.  When executives engage in this behavior according to various speakers in Boston, they are said to “swarm” like a hive of bees but when regular employees engage in the same activity it’s referred to as “dog-piling”.  Why this double standard?  I think it would do the executive class some good to develop a mindset of rolling up its sleeves and working to delight its customers as in dog-piling.  I don’t really care which animal metaphor is used but one only, please.

    Back to Denning and his wonderful book.  Denning spends some time analyzing the effectiveness of Fred Reichheld’s net promoter score of which he is a fan and which is at least one source for the idea of customer delight.  Denning did some interesting qualitative research that applies to this discussion.  He checked out the mission statements of the twenty biggest companies in the Fortune 500 to understand their customer outlooks.  Guess how many are in business to delight their customers?  None, zero, nada.  Sheesh!

    Four of the top twenty, which includes names like Verizon, Exxon-Mobile, Walmart, HP, GM, GE and others actually say they’re in business to make money, period.  Others have PR or similar safe sounding goals but none exist to delight you and me.  It’s all about maximizing shareholder value — an idea that has been around for a while and gave us the swashbuckling attitude that nearly melted the di-lithium crystals in the world’s economic engine room.  Time for a change?  The tools are now available.

    Denning is pointing out that it might be time to think again about corporate responsibilities and duties, Benioff is providing at least some of the how-to, and energy.  Both men have a lot of work to do but at least the journey has started.  That’s why social is inevitable and why the Enterprise 2.0 conference in Boston this week is bigger and more important than ever.  I will be looking for even more at Dreamforce.

    Published: 13 years ago


    Someone recently asked me why collaboration is important in the enterprise.  To be specific, they were asking about the kind of collaboration that products like Yammer and Chatter enable.  This collaboration consists of enabling people to share thoughts, ideas and micro news bits in a social context without the usual institutional overhead of email or a meeting.  Collaboration more resembles Twitter than email and I suspect, but have not collected the data to prove it, that a typical collaboration emission is shorter than a tweet.

    But the question got me thinking about other times and situations when the same kinds of questions were asked about the latest technology.  No matter how the question is posed, the heart of it is frequently something like this: Are we wasting time and money doing this or is it the real deal?

    It’s a fair question.  We all live with limitations — so much time in a day, so much money in the budget and so many more demands on both that we can fulfill so what does a sane person do?  Well, history might be a guide though it is not infallible.

    Throughout my career the big theme has been converting the economy from one that manages and produces things to one that manages and produces ideas and information.  We all know this and if we take a moment to consider it, this means our recent history is also about finding better, faster and less costly ways to share information.

    I compiled the attached table from data served up by the World Bank.

    Year US GDP (Trillions)
    1975 $1.623
    1985 $4.185
    1995 $7.359
    2005 $12.58
    2009 $14.119

    It shows the U.S. Gross Domestic Product by selected years, which I picked for specific reasons.  In 1975, we were in the early days of the mini-computer revolution and GDP was a healthy $1.623 trillion, a lot of money to be sure but puny in comparison to things to come.  Ten years later GDP had jumped about two and a half times to $4.185.

    That’s because by 1985 we were enjoying the benefits of not only minis but desktops.  During those days I can distinctly recall people asking if it was really necessary to have a computer or terminal on every desk top.  That was about the era when company phone systems became popular and just about every company had bought a fax machine.  The phone system replaced those awful black receivers with multiple lines and made it possible to forward calls, have three way calling and whoa! voice mail.  No more coming back from lunch to pick up those cute little pink messages.  Phone, fax and computer formed a powerful trio for information sharing.

    By 1995 GDP had grown again nearly doubling to $7.359 trillion.  I remember economists like Alan Greenspan trying to explain what was going on in the economy.  Testifying before congress they looked like C students who were trying to explain why they were suddenly getting A’s in Physics.  That’s because by 1995 the economy was growing like a proverbial weed but in a different way than anyone had witnessed before.  The economy was growing with little inflation, the amount of work produced by the average worker was climbing without any noticeable additional input of capital.  That’s called productivity and we were better at it than anyone else who had ever lived on the planet.  The productivity was driven by our new technologies.

    The bigger the economic number the harder it is to double but by 2005 with the evolution of the Internet well under way the U.S. still managed a very healthy $12.58 trillion GDP.  And even with a recession and an unnecessary financial economy meltdown driven by stupidity, by 2009 U.S. GDP was a lofty $14.119 trillion.

    So when people ask me about the goals and measures they should apply to tools that get information to employees so that they can work better and smarter I am tempted to say something flip.  The truth is that the improvements we all crave in business are accretive — they build up over time.  You might not even notice an improvement in the first year but you will.

    A better question might be, is social media within the enterprise the real deal?  And I think that answer is yes.  It’s yes because it follows in a long line of tools that have enabled us to work with information in surprising and creative ways and those ways have spurred significant economic growth over more than thirty years.

    There are names for this like paradigm shift and names for the people and companies that make the change.  Some are called early adopters others are laggards and where you come down in all of this determines how much benefit you receive from the transition.  Be early to the party and you reap rewards that are disproportionate your meager investment.  Arrive late and you are at best playing catch-up.

    Published: 13 years ago