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I had a great conversation with Carnegie Mellon Professor Chris Labash this week. We discussed a wide range of topics as they relate to innovation, including:

• The role of technology
• The importance of understanding human behavior and culture
• The impact of non-financial rewards
• The need for methodologies and processes
• The limits of crowd-sourcing
• The requisite for risk intelligence
• The importance of communication and face-to-face exchanges

To listen to the podcast and read a more detailed post about the discussion, please visit the Collaborative Innovation community.

Unless your company acts as a single tribe, which most companies don’t, you don’t have a single corporate culture. Therein lies the problem with most corporate culture initiatives — they start from the wrong premise that companies are people and that they therefore can have one culture. In reality, most companies have multiple cultures which results in having competitive behavior in the wrong place — within their corporate walls instead of outside in the marketplace.

So what is going on here?

As Edward O. Wilson said in his recent book, The Social Conquest of Earth, “People must have tribes. It gives them a name in addition to their own and social meaning in a chaotic world.” Tribes have cultures, organizations don’t — unless they are one tribe. Most organizations have many tribes — you may have a developer tribe, a sales tribe, multiple customer service tribes, a cost conscious tribe, an innovator tribe, a middle management tribe, or a tribe of Belgian-American wine drinkers. Having multiple tribes means that you have multiple cultures. Tribes share common systems of beliefs and values, they have their own language, their own rituals, and their own leaders — who may in fact have no place on your management org chart. Having multiple tribes also means that you have many “us vs. them” or “insider vs. outsider” feelings, something that always happen among tribes.

And that is where the internal competition comes from…a generally unhealthy corporate state of affairs if you are competing against a competitor which behaves like a unified tribe and which can channel all their energy to compete in the marketplace or to achieve a “change the world” type goal.

So what does that mean?

For starters, most traditional corporate culture change management programs fail…since most of them start with the assumption that organizations have a culture. The other implication is that by having multiple tribes, and in some cases mutually incompatible tribes, you may waste a lot of energy on infighting instead of innovating and competing in the marketplace.

There are ways to analyze corporate tribal cultures properly, and there are also ways to align them more closely with corporate innovation and collaboration strategies, but more on that later.

Last week I wrote for the Collaborative Innovation blog about the fact that perhaps you do not need a culture of innovation, since innovation has been an integral part of the culture of modern humans for thousands of years. This implies that you need to remove the barriers for innovation if you want to increase innovation within your company — not build new structures for it.

Another important Human 1.0 characteristic that most companies are not leveraging enough is social learning. Humans are the only species that are predominantly social learners. We learn by observing others. It is genetic and also part of our culture. Think of a baby that mimics adults before they can sit, walk,or talk — in fact they do it almost instantaneous after being born. That is the hardwired social learning system that humans have had for eons at work.

Where else could you leverage this innate human characteristic?

1. With your customers
   We mimic what others do and adopt the decisions of our tribes as our own. Some call it herding. The key here is to make visible how others make buying decisions to similar people who have not yet made those buying decisions. Amazon does a great job at that — how many books or other Amazon items have you bought because their system told you, after you purchased an item, that “others who bought this item, also bought this?” It works — we tend to imitate others that are like us. How can you make the way others buy your products and services visible to prospects that are like them? Think about it. Traditional reference programs are a step in the right direction, but in this digital and interconnected world, there must be much better ways to do that.
2. With your employees
   Many companies go through massive change management programs without ever leveraging the social learning for which we are hardwired. We mimic people who are successful — that is how we learn new things. So if your change management initiative is intended to produce certain new behaviors, make sure you reward and recognize those that are exhibiting that behavior, and make it easy for others to observe this behavior leads to success. Granted, in the real world it is much more complicated than that. For starters, behaviors are an externalization of shared beliefs and values — and so the right set of values and beliefs have to be in place for the proper behavior to show up in the first place. But once you have that — too few companies leverage the impact of the observability of success. Worse than that, many companies have a total dissonance between what they say and what they do — they may be encouraging a collaborative culture, while at the same time rewarding bullying management tactics by promoting the bullies. Guess what, this will inevitably lead to a bullying culture because we are social learners.

Do you have any other thoughts on this topic — write about it.

Today we released preliminary results of the Social Workplace Trust Study, a study that was co-sponsored between Human 1.0, The Great Place to Work Institute, The International Association of Business Communicators, and The Society for New Communications Research. We will post the recording of the webinar in which we previewed a sneak peek of the results tomorrow, and you can find a copy of the deck we used on Slideshare.

So why did we release a sneak peek of the findings?

We truly believe that there is so much in the data that the more we socialize it with people who have an interest in the topic the better the findings from the study will be. If you are interested in discussing the data with us, please contact me at francois [at] human1 [dot] com.

So what are some of the high level findings?

Finding # 1 – most respondents believe that the best way to learn about a company is through social media and that the accuracy of information about a company is higher in social media than on company websites.

The people who agreed with the statement “One of the best ways for a person to learn about a company is by using social media” outnumbered those that disagreed by a factor 1.5X. When we asked the same question from heavy users of social media, that factor became a whopping 15X, and when we asked the question to people outside of the marketing and communication functions, that factor became 2X.

The respondent who agreed to the statement “What I read about a company on social media is more accurate than what I read about the company on its own website” also outnumbered those that disagreed by a factor 1.5X. When we asked the heavy social media users, that factor became 5.5X, and without the communication and marketing functions, the factor became 2.4X.

Finding #2 – if you treat your employees as adults, instead of as children, you can expect a work environment with higher trust, higher loyalty, and higher employee self-esteem.

Treating an employee as an adult encompasses many cultural traits – including risk, trust, hierarchy, passion, and a set of human-centric belief systems. We used the answers to 5 questions from the survey as proxies for determining whether employees were treated as adults or children. The subsequent findings were amazing.

People that are treated as adults are 3.3X as likely to trust management, they are 2X more loyal to the company, they have 1.7X as much job satisfaction, they take pride in talking about their work with others that is 2X that of people treated as children, and 1.5X as many people who are treated as adults consider themselves having larger social networks than others. Now can you see the benefits that companies who treat their employees as adults must be gaining in terms of talent acquisition and retention, increased innovation and word of mouth?

Not only are the benefits not incremental, they are totally non-linear. If you treat an employee as an adult, not only will they participate in conversations about their company in social media by a factor 3.3X compared to those treated as children, with 1.5X as many of them having larger than average social networks, they will buzz more to more people – and therein lays just one of the exponents.

We also found a clear link between treating employees as adults and passion. The factor there is between 2X and 12X – that means that people who are treated as adults are 2-12X as likely to be passionate at work. Now if you are familiar with some of John Hagel’s work on passion, he found that people who are passionate at work are 2X as likely to tackle tough problems and have social networks that are 2X as large as those that do not have passion at work. Again, can you see the benefits in terms of knowledge flow and innovation?

We have many other findings, including how management actually does live in a “bubble”, how there might be an employee engagement gap, how many companies still discourage the use of social media, and how they fail to use social media to humanize their brands.

Another key finding is how companies expose themselves to significant risks and liabilities by not providing training or “guard rails” on the proper use of social media to their employees.

Again, those results are preliminary. We are still conducting qualitative interviews and cross-tabulating survey results, but if you would like to get involved and make it better before we release the final findings, please be in touch.

Seriously — is it?

I have finally had a chance to catch up with some blog reading and have been struck by the number of people who focus on building social media programs to reach customers and prospects in new ways. And they use advertising metrics like engagement to decide how successful their programs are.

That is not what this current wave of innovation is all about!

While using traditional marketing programs in social media environments may yield some results, they do not leverage the social…they are plain old marketing programs that are driven by incentives, coupons, or other traditional marketing drivers. They die the minute you stop fueling them.

As some people have called it, social media a platform for participation. It’s actually a massive platform of participation that allows the social for which humans have been hardwired, to scale to the point where it makes a difference in business again – both as employees or customers/prospects.

Those companies that are successful in leveraging social media do not use it as a channel to reach audiences. They use it to turn their business processes into social processes – they power their business with people. They get all their employees and customers participate in product innovation processes, customer support processes, knowledge management processes, marketing and sales processes and others. They don’t care about engagement, because in many cases, as is the case when you try glean insights from the marketplace, engagement with the company is not even required – its the engagement among the people that counts.

If you are interested in the topic, you may want to join us for our Hyper-Social Mini Summits coming up in January, where we will be joined by companies who have done it before and brainstorm with executives on how to make that work.

It used to be that the company with the better product won. Then came the age when the company with the better message about the product won.

Very few companies still win with on the basis of having a better product. Apple is probably one of the few that can still achieve that. Their products are cool and we buy them because coolness used to get us better mates.

Most companies can no longer win that way. Coming out with products that have new features no longer gives us a sustainable competitive advantage – either users don’t care, or if they do, competition catches up in no time.

It’s also much harder to differentiate your offering based on the story you might craft about it – as customers and prospects are now increasingly owning that story.

But so – how do companies win today?

The way companies win these days is by delivering services on top of their products that make customers go WOW.  The reason why exceptional service is the new competitive differentiator is not just because it’s easier for competitors to catch up product-wise, but because the news about exceptional service travels fast in the networks that matter – peer and friend networks where the buying decisions are increasingly being made. When people recommend products to friends, colleagues, and acquaintances, they do not focus on the features, functions and benefits the way many marketers have been trained to do – they focus on the overall experience of adopting the solution, and the exceptional qualities of that “whole” offering.

So if you are like most companies and operate in a market where it is really hard to differentiate  based on the product alone, you got to focus your attention on WOW service offerings.

What do you think? I would appreciate your input and feedback.

(Cross-posted from the CMO 2.0 Conversation site)

Today’s CMO 2.0 Conversation with GE’s CMO Beth Comstock was packed with interesting insights. On a personal note it was certainly neat to get a one hour personal marketing tutorial from the CMO of one the largest companies in the world. By working in a real marketer’s laboratory, Beth must be one of the luckiest marketers around.

We touched on three main topics: the role of a corporate marketing group in a large diversified company with strong operating companies, how to foster innovation at GE, and general changes in marketing.

As a central corporate marketing group, Beth’s team is responsible for sales growth, innovation, and the GE brand platform. Even though the company has very diverse operating companies, her team has also been able to find opportunities for developing a customer platform (i.e., cross-sell accross business units), as well as product platforms (i.e., ecoimagination, the GE green platform, and a cross-operating-business battery project).

On the innovation side of things we touched on the importance of having a robust pipeline of innovations and on the need to have the right resources deployed across the right portfolio of innovations. We also discussed the need to kill ideas faster and the opportunity to create an innovation marketplace for ideas that may not be a good fit for the company. Beth described GE’s robust innovation process, and how they have both a formal process that very much resembles an in-house venture process as well as an online imagination network that relies much more on the wisdom of the crowd – in this case their employees. Other innovation related topics we covered include:

• how they use outside coaches and customer discovery sessions to bring outside insights into their innovation process
• the importance of including detractors in the innovation process
• how innovation is not just about technology innovation, but also about commercial innovations – and how they are constantly looking for new ideas around product, space, and business model
• the cultural changes required for fast-paced innovations and the creative tensions between being a process-driven organization and the inherent messiness and chaotic nature of innovation
• how in some cases you need to step away from traditional metrics to measure progress and success of ideas that are being incubated

We also talked about the changes afoot in marketing and how the new marketing challenge is in fact a knowledge management challenge – knowing enough about your customers so you can feed them data that will make them smarter.

On the need for new marketing skills Beth listed what she is looking for in marketers – people with new world skills, people who can simplify things and engage in customer communities, and people who can curate an experience for the customer. She also described how they set up a team of “rogue marketers” within the company, whose job it is to come up with rogue marketing techniques. It would be really interesting if at some point they would publish their findings in rogue marketing innovations.

You can listen to the podcast over at the CMO 2.0 Conversation site, in the near future we will also post the transcript from the interview.

As part of the prep for my presentation for this week’s o’Reilly Event on Publishing, I looked at how some old school media companies are using social media.

One of the funnier things that I ran across was how the New York Times was using twitter when compared to Guy Kawasaki with his Altop publishing company.

Funny when you look at it. The NYT has 68K+ followers and is following 80 people back, mostly NYT people. Guy has 60K+ followers and is following about that many back.

So the New York Times is bringing its legacy mindset to twitter – “we talk at our audiences with limited feedback capabilities.” I bet you they might have suggested a letter to the editor feature to the twitter folks

Guy on the other hand is talking with his audience…a much better thing to do.

In reading the book The Happiness Hypothesis by Jonathan Heidt I came across an important element that makes ultrasocial societies work – reciprocity.

Heidt defines ultrasociality as: living in large cooperative societies in which hundreds of thousand of individuals reap the benefits of an extensive division of labor. Only four instances of ultrasociality are in existence – among hymenoptera (ants, bees and wasps), termites, naked mole rats, and humans. In all species but humans the force that makes that possible is the genetics of kin altruism. In an ants nest or a bee nest, everybody is brother and sister, and since you have as much genes in common with your siblings as you have with your children, the evolutionary drive to leave surviving copies of your genes makes those ultrasocial communities work – shared genes equals shared interest.

In societies that are not structured like bee or ant colonies, the shared set of genes that you have with others drops off rather dramatically – while you share 50% of the genes with your children and siblings, you only share 1/8 the genes with your cousins, and 1/32 with second cousins. In a strictly Darwinian calculation, you would only spend as much energy to save 4 of your cousins as you would for 1 child or brother. That is why kin altruism explains only how groups of a few dozen, or perhaps a hundred, animals can work together. The rest would be competitors in the Darwinian sense.

So what happened to human societies? How did we get fictitious families, like the Mafia, where there is no real kinship, even though they talk about the Godfather and being part of the “family”, to work as ultrasocial societies? It’s the old fashioned “you scratch my back and I’ll scratch yours” phenomenon – which is in fact a mindless and automatic reciprocity reflex. if someone receives a favor, that person will be driven to repay that favor – not because it the proper thing to do – but because it is a built-in ethological reflex. It’s tit-for-tat, hardwired in our brains, that opens the possibility of forming cooperative relationships with strangers. Now mind you that tit-for-tat can only explain the existence of social groups up to a few hundreds. What allows larger social groups is its co-existence with vengeance, gratitude and gossip as tools that reduce the payoff to cheaters by the cost of making enemies.

Those very primitive hardwired human behaviors confirm a lot about what makes online communities work as well – the importance of reputation, the importance of self-organized posses to police communities, the importance of helping one another as a currency, and the failure of communities where reciprocity is not an integral component of the community.

Many companies seem to have legal departments that put up huge barriers to adopting communities and other social media programs that include employees, customers, prospects and even detractors. In fact some put up barriers so high that nobody can do anything in the space. Now, if your competitors cannot find a way to overcome those objections either, you may be ok, but if they do and manage to extend their business processes to leverage the power of the internal and external crowds, it may be “game over.”

Typical legal objections include the issues related to brand protection, engaging hourly workers as part of internal communities, the threat of liability for what employees say in public, having employees socialize online instead of doing work, meeting regulatory compliance requirements, and more. While most legal departments will claim that their situation is very unique, at the end of the day the issues are fairly common among many companies.

I do not think that there is one best practice on how to overcome those objections. Some companies find it easier to get legal involved upfront in the process, while others are asking legal to quantify the risks and then balancing those with the benefits or the risks of doing nothing. One good bit of common sense (as recommended in this BT case study) is to make sure that you do not overhype what you are trying to do and position it as something radically different from other programs. Many companies already have policies in place that cover things like email communications and acceptable behavior in public forums – which could possibly be extended to virtual environments without too much change.

What have you found to be working?