For someone who co-authored a book on how companies that succeed in leveraging this current wave of innovation, powered by the social, do so by turning their business processes into social processes, it may seem contradictory to now hear that you should not turn your business into a social business.

There are several reasons why those two concepts are very different. And most pundits declaring that  you should be building social businesses are missing the point.

First off, a social business (see WikiPedia entry) has been defined by Nobel Peace Prize laureate Professor Muhammad Yunus inhis book Creating a World without poverty — Social Business and the future of capitalism as a “non-loss, non-dividend company designed to address a social objective within the highly regulated marketplace of today. It is distinct from a non-profit because the business should seek to generate a modest profit but this will be used to expand the company’s reach, improve the product or service or in other ways to subsidise the social mission.”

If you’re GE,  IBM, or Pfizer, you may not want to turn your business into a social business.

What you want to do is to power your business processes with humans and the social characteristics that have been innate to them for tens of thousands of years . You want the individuals and their creativity to help you humanize your brand, you want people from outside your R&D department to help you innovate, you want human employees (as opposed to corporate automatons programmed to stay on message with corporate speak) to engage with humans who may want to buy your products or come to work for you.

Companies that found the key to making this work do end up with social benefits — happier employees, happier customers, tighter-nit communities, etc. — but they do not need to become a social-objective driven enterprise to do that.

You want to turn your business into a human-powered enterprise, we called it a Hyper-Social Organizations,  not a social enterprise — and therein lies a big difference.

What are your thoughts? I will try to get back to more regular blogging…(and I know you’ve heard that one before

There was a lot of talk at this week’s Enterprise 2.0 Conference about creating unified customer experiences. Questions being bantered around included who should own the unified customer experience and what technology should be deployed to ensure a unified customer experience.

Of course, and as Tom Asacker (@tomasacker) rightfully pointed out in a tweet, you can never create a unified customer experience, as the customer experience gets formed in the mind of the customer – not in the actual transaction. That experience will be based on a customer’s context that  is totally outside of the company’s control.

But assuming that what is meant is to attempt to offer a consistent customer experience, as it would be witnessed by a neutral observer – it is interesting to see how most people focus on the company’s hardware, people and infrastructure, and don’t talk much about the company’s software, its culture.

As you (hopefully) allow more and more people within your organization to interact with your customers, prospects and detractors, you will dramatically increase the number of touch-points between your company and the marketplace. If it also your goal to humanize the experience with your company by allowing employees to be themselves and not to sound like corporate automatons, you will also increase the chances of inconsistent user experiences.

So how do you manage that customer experience across those multiple and diverse touch-points?

Technology and organizational responsibility may play a role, but the fundamental thing you have to have in place for any of this to work is the right corporate software – the right culture. And you can influence culture by adopting, and by living by, a simple set of values. Do like Dell, where the simple values are “be open, be transparent, be simple, and be caring,” or Jetblue, where the values are “safety, caring, integrity, fun and passion.” At Jetblue it allows them to predict how frontline employees with react to a customer problem within 97% accuracy – there is no software or organizational structure that would do that for you. There are of course other examples of companies doing that right, including the Ritz and Best Buy.

But how are those values different from your vision, mission, values, beliefs and other corporate documents that are often useless?

At those companies where they work, everyone lives by their values. It forms the DNA of their culture. If you cannot live by those values the organization will eventually repel you.

In those companies where it does not work, nobody, including the executives who spent fortunes on creating them, could recite their values, let alone live by them. They are a useless set of words that gets used in the annual report once a year.

Culture will trump anything in this large-scale social age, as it always has.

Many companies are trying to understand and predict online social behavior using traditional marketing research techniques – both qualitative and quantitative. In most cases those companies are in for big disappointments.

Let’s take a classic social phenomenon to make the point.

You have a crowd of 300 people who come to fill a theater with 500 seats. When they are all set and done, you will have clusters of people with big empty chunks of seats in between them, maybe nobody sitting in the front, and perhaps some surprising groupings of people.

How would a market researcher approach this situation?

The qualitative person would probably try to interview everyone ahead of time and make cluster predictions based on kinship, friendship, professional affiliation, etc. Not knowing when people arrive, nor understanding the true social motives for sitting in a particular place at a particular moment, most of those predictions would be wrong. Yes, maybe a couple will tell you that they intent to sit with a pair of neighbors, but when they get there, spot a potential client who they did not know would be there, and realize that the neighbors are not there yet, they might very well change their mind. There is no qualitative data, that you could have uncovered ahead of time, that would let you make that prediction.

The quantitative person would wait until everyone sits, lift up the curtain and take a snapshot of the sitting arrangement for further data analysis. The problem is that the data won’t tell you anything. If there is a cluster of single women in the theater, you have no way to know, based on the data, whether those people were motivated by being with others who are just like them, or whether they maybe all came together as part of a mommy social group. If there is a cluster in the back, you have no clue whether those people were motivated by the desire to potentially leave early, or whether they wanted to be in a position where they could observe everyone else in the theater and just have a better people-watching vantage point. The data is meaningless when it comes to predicting social behavior.

So what can you do? You need to be more like an anthropologist and less like a market researcher. If you have the luxury to interview people ahead of time, and then watch the seating arrangement in progress, you will be able to make more informed assumptions, but you will still need to validate them through qualitative interviews afterwards. If you don’t have the luxury of interviewing people ahead of time and see the seating arrangement in progress, you can still make assumptions and validate them through qualitative interviews.

But by focusing on understanding the parts of the whole through individual qualitative interviews or the whole by capturing data about the end result only, you will not learn anything meaningful about the true social drivers of this social gathering.

The lesson – don’t try to understand online social behavior by doing traditional qualitative market research like interviews or focus groups (in which people will tell you what they want you to hear anyway),  nor by doing sophisticated quantitative analytics research. Neither one will give you good results. Instead, focus on observing what happens, make assumptions and predictions based on basic human cultural behavior (need for status, need to hang out with like-minded people, need to impress others, being competitive among groups, etc.), and validate those assumptions through qualitative interviews and more observation.

Social “anything” is hot these days, and everyone is jumping on the bandwagon to define what it means (full disclosure (in case you missed it): including myself).

Social learning, social recruiting, and social talent are some of the most recent ones that made it onto my radar screen. Unfortunatelly, and too often, people view the social aspects of traditional business processes through narrow-minded blinders. And that, inevitably, will result in missed opportunities.

Take social learning as an example. What does it mean to you? A way to expand the learning process to leverage the power of the crowd? “Designed” to reduce cost and increase the efficiency of the learning process?

Sure…

But social learning is also much more than that. Social learning is about understanding that we do not need to learn everything ourselves – that some other team/tribe  members may be better at learning  certain aspects of how our world functions. It is about knowing who those people are and having lines of communications to tap into the knowledge they have when we need it. Social learning is not about social media, nor is it about crowd sourcing – social learning is about learning as a tribe (you know certain things better than I do and I trust you for being knowledgeable and up to date on the latest and greatest related to that topic) . The main benefits to organizations are neither bottom line nor top line (those are nice side-effects), they are game changing and relate to employee passion and customer loyalty.

Turning business processes into social processes allows you to scale those processes to levels that you could never achieve with traditional management techniques. And the benefits you derive from creating social processes always go beyond cost savings and increased productivity.

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.

What do you expect from your marketing department – to be your brand advocates in the marketplace or to be your customer advocates within your company. Chances are that you will say both but only empower and reward them to be brand advocates in the marketplace.

And therein lies a problem.

You see, most buying decisions happen when your people are not in the room – not part of the conversations that lead to buying decisions. So for them to be brand advocates is to a certain degree a waste of time. What you need is for your customers and prospects to be your brand advocates. They will be more effective as they participate in the conversations that matter.

Brand advocacy among your customers and prospect is a naturally occurring phenomenon – as long as you do not screw up in the marketplace that is. The question is, how can you increase the volume of brand advocacy among your audiences? The answer is not by adding company-employed brand advocates to the mix. The answer lays instead in turning your marketing employees into passionate customer advocates within your company. By having them become customer advocates they will gain a higher level of trust among your customers and prospects – giving them a more prominent  seat at the table where the real buying decisions are being made. Not only that, but by turning them into customer advocates instead of brand advocates you will also break the “groupthink” mentality that often occurs within new product innovation teams – allowing you to build better products and reduce your new product failures.

So by setting up a reciprocal relationship with your customers as it relates to advocacy – I scratch your back if you scratch mine – you will end up with a higher level of influence in buying decisions and in the long run perhaps with better products.

Most communities have 90% of users who are lurkers – people who may consume things from the community, but who don’t contribute. Through our yearly Tribalization of Business Study, we found that many companies who run communities consider this a problem (30% of respondents considered it an obstacle) – and that of course is a problem all by itself.

You see, not all lurkers are created equal.

While it is inevitable that larger communities will end up with 1% of their members being very active users who provide enough value for the 9% of somewhat active users, who together provide enough value for the 90% of lurkers, the largest form of participation in online communities happens to be active lurking, which according to an MIT research study can make up 40-50%  of your community membership. Active lurkers are those that may take something from the community and pass it along to others using different channels – so they participate in your word of mouth. Active lurkers also include those people who may visit a customer support community and find a solution to their problem without contributing to the community. Those people derive a lot of value from that community interaction and so does your company since they do not clog up your customer call center. Active lurkers also include those who will contact the original poster through a different channel, like telephone, email, or perhaps a face to face meeting – in effect continuing the conversation outside of the visible public side of the community, but not outside of the community itself.

Thankfully we found that 18% of companies who participated in the 2nd Annual Tribalization of Business are starting to track lurker metrics. It’s not easy to measure the impact of active lurkers, but without some sort of measure about their activity, you could miss a lot of the value that they bring to your Hyper-Social processes – especially in a world where the customer lifetime value is directly proportional with word of mouth activities.

When you think about communities, you need to think about the tribes and their members first, not just one of the public places (the online community forum) where they can interact with other tribe members. They will inevitably interact in multiple places, both virtual and physical.

One-to-one marketing was supposed to be the holy grail of customer relationship management.

Companies would no longer have to isolate us from the rest of world as a group to sell to us; they could actually do it on an individual basis. Problem is that we are hyper-social beings who prefer to operate within our tribes. We do not want to be isolated from our group so that sales people who know more about us than we feel comfortable with can give us the hard sell. We want the buying process to be a social process. We don’t trust companies to be on our side and prefer to get the information that will let us make sound buying decisions from our peers. The good news is that those hyper-social tribal peers cannot wait to help us and warn us about bad products and services.

As a team we may want to customize our group workspace, the tools we use, or the T-shirts we wear, but we don’t want one-to-one product customization. In fact we do not like too many choices. Research  has shown that it significantly reduces our willingness to actually buy something. Even mass-customization leads to “mass confusion.”

Forget one-to-one, it never worked and never will because we do not want to be unique, we don’t want to have one-to-one conversations with companies, and we do not really want customization.

Now, wait – don’t throw that CRM system out just yet. While we may not like to have you try to sell us on a one-on-one basis based on all that rich data you have about us, we love it when we are actually ready to buy your product, or when we have a problem with your product and we call your call center, to feel super special by having you recognize us and treat us as if you were a long lost relative trying to help us. We also like it when “the system” (your ecommerce site or your online community) recommends content and people for us that is highly valuable because it’s based on what you know about us – much like Amazon will recommend us books, or the Apple Genius music.

Remember this – when we are ready to buy or when we have a problem with your product or service we want to be treated as an individual, when we are in the process of making a buying decision, we want to be treated as a member of our tribe. And yes, the logical extension of that thinking is that all your behavioral and contextual targeting campaigns are in fact a colossal waste of time and money. During the sales cycle you need to target our tribes!

Do you buy this argument? Please let me know.

No matter whether you plan to leverage social media to enhance your product innovation process, your lead generation process, or to amplify the word of mouth that may already exist for your products or company, you first need to find out if your customers, prospects and detractors are already forming tribes in social media circles, and if so, where they hang out.

Understanding who your tribes are and where they hang out will allow you to decide how to engage them – on their own platform (e.g., Facebook group, Ning community, Twitter, or other proprietary platform), on your platform, or on a combination of platforms – a “federated” engagement strategy that most companies eventually will have to adopt. Knowing where your tribes hang out will also allow you to identify the tribal leaders and define strategies to engage those leaders across all your efforts.

Note that tribes almost never form around products, services, or companies – they form around shared passions (e.g., fan clubs), shared pains (e.g., cancer survivors), shared sense of duty (e.g., school alumni communities), or around categories based on common traits (e.g., poor frugal moms). So the Harley community is not a vibrant brand community centered around Harley, as some will lead you to believe, but rather a community based on a common sense of belonging around a shared lifestyle – riding. Tribes are also different from market segments, which are centered around categories based on individual traits, mostly geographic, demographic, or psychographic (e.g., moms who have children) and not around categories based on behavioral traits (e.g., frugal moms who love the art of the deal ).

Failing to understand who your tribes are, where they hang out, and who their leaders are, will result in misguided efforts that will have no measurable impact on your business, or worse, misguided efforts that will anger your potential tribes and their constituents.

I just had another great CMO 2.0 Conversation – this time with Mark Gambill, the CMO at CDW. As usual we started by having Mark provide some context about his company and his focus there. In this case the company is an $8B provider of software, hardware and services to a variety of industries that has more than 400,000 customers.

The conversation then moved to how some of fundamental changes in the industry – e.g., the fact that people are making their buying decisions based on information they gain online and in social networks, that they increasingly bring their own tools to work, and that mobile devices are more and more looking like full fledged computers – is affecting marketing. Mark talked about the blurring lines between consumer and business applications and about the need to not flail as a marketer when it comes to integrating social media as part of your marketing mix.

He also talked about the need to segment customers differently and how deep consumer research allowed them to uncover six customer profiles that help them better answer the questions: “what do we stand for?”, “who do we serve?”, and “how do we win?” Interestingly enough (and we see more and more marketers follow this trend), much of the segmentation was based on behavioral characteristics of potential buyers and not traditional market segment data. Other information that came with the profiles include data on where those people like to hang out, how they prefer to receive and consume their information, who else they are listening to, and more. All of this allows them to create and distribute content – both online and offline – in a much more effective way than what they were able to do before.

We then talked about the challenges of developing a recognizable brand when you do not manufacture your own products but instead distribute those of companies that may have pretty strong brands themselves. The way CDW tackles this complex problem is by being “technostic” (meaning technology agnostic) and by positioning themselves as a trusted solution partner. They also realize that buyers establish trusted relations with people more so than with companies or organizations, and so every customer gets a dedicated account manager. With a maniacal focus on customized personal service for every customer they hope that this is what will allow them to deliver against that “trusted partner” brand promise.

We also talked fairly extensively about CDW’s commitment to and use of social media. They had started a small business community but then decided that they would be better served by engaging, as participants as well as sponsors, in places where people were already hanging out. (It is always good to speak with a marketer who resists “the not invented here syndrome” that we have witnessed so many times when companies deploy communities as part of their business processes. They feel like the only way to be successful is by hosting the community on their own platform, even if a strong community already exists on some other platform.) Mark sees social media as a meaningful way to engage people in the context of customer support, but he thinks there is a scaling issue when it comes to leveraging it for lead generation. This is something we have heard from other marketers who need hundreds of thousands, if not millions of customers to be successful. The key here may be to develop a comprehensive leader/ambassador strategy and to understand how those people will help amplify everything you do across the various platforms where your customers, prospects, and detractors hang out.

Although, as usual, we ran out of time, we did get to talk about the types of people that Mark is looking for in staffing his marketing department. Besides finding people who are a good fit from a corporate culture point of view, Mark is looking for well rounded people who, while they may not yet have the full battery of skills one might desire, can be trusted to learn them as well as embrace future skills that we don’t yet know will be valuable. Another important hiring criteria in Mark’s business is diversity. Mark is also convinced that a CMO has to increasingly become a well rounded generalist, with knowledge that goes well beyond marketing.

Other things that we discussed include:

• The importance of face-to-face meetings in customer relations
• The importance of good customer service in brand building
• How they are monitoring what is being said about them in the social media space and how they are engaging
• The importance of understanding “human 1.0″ in explaining what is happening in a web 2.0 world
• The importance of appealing to the altruistic part of the brain instead of the pleasure side of the brain when running communities
• The impact of the “green wave” on technology sales
• The importance of ROI, customer loyalty and other marketing metrics

As usual you can listen to the interview on the CMO 2.0 site and soon we will put up a transcript of the call.