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According to a new survey, Wiki’s in the Enterprise seem to deliver real results and appear to be sustainable (via Headshift). All that being said, team collaboration adoption in general is still something that 40% of companies give up on as they run into too much resistance.

As part of a client project I ran across a set speeches that former Oracle COO Ray Lane has been making on the “inter” Personal Enterprise (you can find a slide deck used at a Sandhill conference here).

In his recorded keynote presentation, which can be found at IT conversations, Lane reminds us that eighty percent of the enterprise software industry profits currently go to just three companies, while seven thousand companies fight over the remainder. In order to succeed in this environment, he recommends that enterprise software vendors focus on ease of adoption, instantaneous value and a minimum IT footprint. He also says that “…vendors need to make it easy for users to get started and provide real value to the customer before she is required to pay. The user experience should be personalized and contextualized and the product should spread through the enterprise organically, via user recommendation, rather than by management edict.”

That is in fact how we built eRoom Technology to become a profitable $40M company in the early 2000′s. We provided easy ways for individuals and small teams to get started after which the solution would spread organically throughout the enterprise through user recommendations. By the time the CIO at KPMG decided to standardize on eRoom as their collaboration platform, there were already over 2,000 happy eRoom users in the company. We then tried to scale the ease of adoption process by releasing an ASP version of the product. While I still believe that was a good idea, that strategy was not widely successful as the ASP offering never fully got embraced by our “enterprise” sales force. The shift from big upfront payments and fat commission checks to a more predictable pay-as-you go scheme was just too much of a culture shock.

In a lot of ways, that is also what is happening with Enterprise 2.0 tools – the adoption of Web 2.0 technologies within the enterprise. But as Harvard Business Professor Andrew McAfee, who coined the Enterprise 2.0 term, predicts, most Enterprise 2.0 tools will remain confined to geek-heavy groups, companies or industries, or at best they may find spotty mainstream penetration.

Part of the reason here is that while the tools do spread organically, they still have a long way to go in terms of user friendliness, depth of features, and seamless integration. Without those aspects, non-geeky users and innovators will have a hard time finding value in the tools.

[Tags: web 2.0 enterprise 2.0 innovation technology adoption]

In a recent interview for the BBC, Tony Blair’s outgoing strategy advisor brings up a few good points on how the Internet is fueling a crisis between politicians and its citizenry. Many of his points are actually valid for the world of business as well.

Too often he says, the web is “used to encourage the “shrill discourse of demands”.” What he would rather see is “more needs to be done by the web community in general to encourage people to use the Internet to “solve problems” rather than simply abuse politicians or make “incommensurate” demands on them.” Talking about the immaturity of the whole environment he said “”We have a citizenry which can be caricatured as being increasingly unwilling to be governed but not yet capable of self-government,” and further comparing the citizenry to teenagers he said “Like “teenagers”, people were demanding, but “conflicted” about what they actually wanted, he argued.”

Social media empowers people to “speak up” and “make demands.” It can also be used to leverage collective intelligence to “solve problems.” Yet the tendency at this stage is for people to whine more than to collaborate on constructive problem solving. This can perhaps be explained by the fact that the dominating tool in the new social media toolkit is the blog, which works better as a single person or small group mouth/shout piece than as a true collaborative environment. Sure, blogs are well suited for conversations or raging debates, but that is not how one typically solves problems. Wiki’s are more appropriate, but still limited to a very small segment of the population – too insignificant to truly act as an empowering environment for community based problem solving and self-governance.

So maybe that is what we could expect from social media 2.0 – a set of rich and intuitive collaborative environments that enables groups of people to spontaneously congregate and collaborate on helping others to solve problems, whether they’d be socio-political problems or problems related to their favorite brands.

Some interesting experiments in developing collective problem solving environments are already underway – such as the Community Wiki, where Keith Hopper discussed the same BBC interview and suggests a few actual projects projects to tackle as a group.

[Tags: collective intelligence social media self governance self organization]

According to Reason, the wisdom-of-crowds-based prediction markets failed for the Senate race this last election. Most prediction markets were putting the likelihood that the Republicans would keep a majority in the Senate at 75-80%.

Does it really mean a failure of the system? If the probability that most people in the “crowd” would predict that the democrats would win 6 out of 7 tight races in order to win a majority in the senate is less than 50%, then the wisdom of crowds would only reinforce that – at least that is what the Condorcet jury theorem says. Besides, predicting that there is a 20% chance that the dems would win those races and thus take control of the Senate is not a negligible chance. In fact, it probably is somewhat higher than the straight probability that pollsters would have come up with.

What do you think?

[Tags: wisdom of crowds prediction markets forecasting]

According to a new study by the Direct Marketing Association, and as reported in DIRECT, email marketing delivers the highest ROI of all media available to marketers. Having just finished reading a pre-release version of WOMMA president Andy Sernovitz’ new book – Word of Mouth Marketing: How Smart Companies Get People Talking – he would probably argue that word of mouth marketing would have the highest ROI as you can get that going with no investments.

The DMA research shows that the return on email marketing in 2005 was $57.25 for every dollar spent, compared to $7.09 for catalog marketing and $22.52 for non-email Internet marketing. The study also projects that all the ROI’s for the different media marketing options are headed down-ward.

The same research also estimates that the commercial email market in the US was $16.5B in 2005, while the direct marketing-driven sales hit $1.806 trillion in 2005 – projected to hit $2.627 trillion in 2011!

Ouch…that sounds like a lot of wasted dollars…there should be better ways to reach people. And no matter what Set Godin says about messaging frequency vs. “being full ,” there ought to be better solutions out there to resolve the ambient findability problem in marketing!

The DIRECT article did not mention anything about the methodology used by DMA – but it is assumed that the study looked at investments vs. “new” customers and “new” revenues – which is a really bad transaction-based metric in marketing.

A more interesting metric would have been to understand how email direct marketing impacts long term customer-relationship-based revenue streams for companies. Isn’t that where the real profitability lies?

MARKETING – it’s not the transaction anymore, it’s the relationship, dummy!

[Tags: direct marketing ambient findability marketing innovation email marketing word of mouth marketing WOM]

The most recent Harvard Business Review reports on a study (requires subscription) that was done on the impact of customer communities on customer behavior at eBay in Germany (disclosure – I have an active interest in this topic as I have agreed to chair a conference on the business of communities – Community 2.0 – but more on that later).

The numbers are quite interesting. The experiment involved 140,120 eBay customers who had bought or sold on eBay but who had not participated in the eBay customer communities before. 79.242 were invited to join the online customer community, while the remaining 60,878 were used as a control group. Of the people who were asked to join the community, 3,299 became active participants and 11,242 became lurkers. Over the course of a year they compared the behavior of the active participants and lurkers to that of the control group and found that:

• Lurkers and active participants won up to 25% more auctions
• Lurkers and participants paid prices that were as much as 24% higher
• Lurkers and participants spent up to 54% more money in total
• Active participants listed up to 4 times as many items
• Active participants earned up up 6 times as much monthly sales revenue
• For first time sellers who were lurkers and participants, 10 times as many of them started selling on eBay after joining the community

All in all the activities of the lurkers and participants resulted in 56% more sales during the year of the study – bringing in millions of additional dollars into eBay’s bottom line.

So can the results of this experiment be replicated in more traditional businesses?

Some people clearly think so, while others who used to be very enthusiastic about the business of communities are starting to become very skeptical.

Communities require a certain critical mass to get going – and not all companies have a large enough customer base to get to that point. They also require a lot more work and resources than most companies are willing to invest – to set up the infrastructure, to nurture the communities, to acquire content, etc.

Active communities of employees, customers and partners are clearly powerful management instruments that can dramatically improve core business processes like innovation, product development and marketing & sales. They can also backfire and have very negative impact if they are not managed properly, or set up wrongly. Before embarking on this path, companies have to truly understand the dynamics as well as the pros and cons of communities. They also need to find out if they have the resources and wherewithal to create their own communities or whether they should play in someone else’s sandbox.

Unfortunately, many will start the process by throwing technology at the problem – let’s just hope that those ignorants won’t destroy the market for the rest of us like email spammers destroyed email marketing and (un)ethical zealots are slowly destroying word of mouth marketing.

[Tags: community management customer community community marketing wom word of mouth marketing]

Fortune’s most recent issue has a number of articles on the increasing chaos in markets, technologies customer behavior, and products. Business models that sustained companies for decades no longer work. Companies can now enter and leave markets at a moment’s notice. Market disruptions happen faster and faster.

According to the article, the way to manage chaos is not by retraining managers, it’s by changing people’s mindset and assumptions about business, management, and most economic principles we grew up with. Successful companies are meeting the challenges of a chaotic environment with chaos – by loosening controls, getting rid of hierarchies & titles, providing full transparency into all aspects of the business and more.

What causes all this change? For starters, the fact that companies can now operate free of physical assets makes them both more flexible and vulnerable at the same time. Next is the fact that with the advent of the Internet we have witnessed a dramatic power-shift towards the consumer. Information about products and services, which used to be controlled by the seller – giving them an unfair advantage – is not only widely available, it is complemented with free flowing consumer generated content that gives the consumer the upper hand in the power play.

And the chaos is here to stay. As the article points out “the forecast for most companies is continued chaos with a chance of disaster.”

The only way to survive is to allow your company to operate at the edge of chaos – something that nature knows all to well how to do. Perhaps the best training for company executives and employees will not come from business schools but from science departments who are studying complexity theory and how self-organized systems can thrive in nature -even in the worst of circumstances.

If you are starting a new company it may be easy for you to inject that right kind of culture in your company’s DNA. For existing companies the only answer is change, dramatic change that is – and as scientists have found, change hurts, and people naturally resist it.

So should we get ready to see many corporate icons dissapear in the near future?

[Tags: business models chaos complexity theory edge of chaos]

The Pew Internet & American life Project just released a new report on the Internet Evolution – The Future of the Internet II (download full pdf here)..

Major predictions by 2020 include:

• A low-cost global network will be thriving and creating new opportunities in a “flattening” world.
• Humans will remain in charge of technology, even as more activity is automated and “smart agents” proliferate. However, a significant 42% of survey respondents were pessimistic about humans’ ability to control the technology in the future. This significant majority agreed that dangers and dependencies will grow beyond our ability to stay in charge of technology. This was one of the major surprises in the survey.
• Virtual reality will be compelling enough to enhance worker productivity and also spawn new addiction problems.
• Tech “refuseniks” will emerge as a cultural group characterized by their choice to live off the network. Some will do this as a benign way to limit information overload, while others will commit acts of violence and terror against technology-inspired change.
• People will wittingly and unwittingly disclose more about themselves, gaining some benefits in the process even as they lose some privacy.
• English will be a universal language of global communications, but other languages will not be displaced. Indeed, many felt other languages such as Mandarin, would grow in prominence.

Some of those predictions seem like they are already upon us and not 14 years out into the future.

It is especially great to see that 56% of the people who were surveyed believed in this scenario: “By 2020, this free flow of information will completely blur current national boundaries as they are replaced by city-states, corporation-based cultural groupings and/or other geographically diverse and reconfigured human organizations
tied together by global networks.”

Unfortunately, many still believe that “governments and corporations will not necessarily embrace policies that will allow the network to spread to under-served populations; that serious social inequalities will persist.” And according to the report “The experts and analysts also split evenly on a central question of whether the world will be a better place in 2020 due to the greater transparency of people and institutions afforded by the internet: 46% agreed that the benefits of greater transparency of organizations and individuals would outweigh the privacy costs and 49% disagreed.The experts and analysts also split evenly on a central question of whether the world will be a better place in 2020 due to the greater transparency of people and institutions afforded by the internet: 46% agreed that the benefits of greater transparency of organizations and individuals would outweigh the privacy costs and 49% disagreed.”

[Tags: pew future of internet predictions privacy]

As part of a potential client project, I finally got a chance to take a real close look at the BlogBridge Library (disclosure – I am an advisor to this open source project).

It is a very cool and powerful application, which enables you to create and manage a central library of feeds, blogs, reading lists, podcasts and more. Different sub-sections of the library can be managed by different people, and with full opml support, it is really easy for you to share the library or parts of the library with other people in your team or company.

The BlogBridge Library can be installed behind your firewall and while it will work with any RSS reader, there are additional features within BlogBridge (my favorite) that will enable you to manage your library straight from within the reader instead of having to go through the web UI.

One obvious application is for Marketing teams and their PR agencies to coordinate rapidly changing lists of social media movers and shakers in their space.

[Tags: blogbridge opml support library rss reader ]

One of the great sessions at last month’s CMO summit, which was organized by Corante and the Center on Global Brand Leadership, was moderated by Johh Hagel. While the session has been summarized in a variety of places, John now summarized his points on his own blog. At the risk of being somewhat repetitive I will summarize/paraphrase the post here as it has a ton of great insight…

So where does John think marketing is going?

For starters, he thinks that the current shift in the economics of business will force major changes in marketing. With attention being the new scarcity and customer acquisition and retention costs being on the rise – business will have to start focusing on economies of scope instead of economies of scale. In customer relationships it will come down to getting the largest share of wallet of any single customer rather than a fix share of wallet across a large number of customers. This whole trend is reinforced by the fact that the cost of interaction and the ability for customers to find information about vendors and products is steadily declining as well.

According to John, this all leads to the need for fundamental changes in the areas of marketing strategy, branding and performance metrics.

In the area of marketing strategy, we need to move from the 3I’s (intercept, Inhibit, isolate) to the 3A’s (attract, assist, and affiliate). Another way of looking at it is that we have to move from a “one to one” marketing to a “many to one” marketing mindset.

From a brand promise point of view – we need to move from a “buy this product because I am great” mindset to one closer to “buy this product because I know you and you can trust that I will configure it properly for you.”

As for the new metrics, try these on for a change: average life time value of the customer (customer service execs – are you listening!), 80/20 segmentation of customers based on profitability, ROA (return on attention), ROI (return on information).

And so what are vendors doing?

As John says, they are…well…acting like vendors!

In response to attention being the new scarcity – they are bombarding us with intrusive ads on animals, in urinals, in the sky, and with other desperate moves to “grab” our attention. John has it right when he says “Rather than just focusing on how to get attention, vendors might also want to consider how they can help their customers receive attention that is important to them and not just from the vendor, but from others that matter to the customers.”

And as is typical with any new wave of tools, they are also jumping on the new social media technology bandwagon – deploying blogs, communities, wikis and other network-enabled marketing tools without really asking themselves how this will help the customer, or how “it will increase return of information for customers.”

John finishes his article with some recommended actions for CMO’s to take: affiliate with partners to create more useful solutions for your best customers, change organizational roles so execs are in charge of the total customer experience, and adopt performance metrics that measure and reward the increase of the lifetime value of the customer.

As usual – a post chock-full of great insights for marketers.

Related Posts:
Whatever Marketing Becomes…
Markets +/vs. Marketing (Doc Searls’ blog)