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Social learning is a human 1.0 trait — leverage it with your employees and customers

October 16th, 2012 francois Posted in adoption of innovation, buying behaviour, Collaboration, human resources, social innovation | 6 Comments »

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.

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Why your employer brand and your consumer brand should be the same

October 12th, 2012 francois Posted in branding, cmo2.0, human resources, Interesting Links, self-organization | 5 Comments »

Many companies have employer brands (that part of the brand that you show to prospective talent) that are different from their consumer brands (that part of the brand that you show to customers and prospects).

In fact research that we conducted in partnership with The Society for New Communications Research found that almost 20% of companies have an employer brand that is different from their consumer brand. And almost 70% of those that said there was a difference between the brands, also said that their organization was not attempting to make them similar.

Worse than having a different brand is when organizations show prospective employees a different organizational brand during the recruiting process as compared to the brand they experience after they are hired – they account for 15% of all companies that participated in our research (1,000+).

Having an employer brand that is different from your consumer brand may in fact not be such a great idea, and here is why:

1. A consumer brand promise in embedded in a company’s culture and how they behave behind the firewall

With more and more employees interacting with customers and prospects, your internal culture will inevitably become part of your perceived brand promise.

As John Kennedy, the head of corporate marketing at IBM said during a recent CMO 2.0 Conversation: “It is this whole intersection between not only what marketers promise and how a product may or may not perform, but also what the company is like behind the brand.” Or as Phil Clement, the CMO at Aon said during another CMO 2.0 Conversation, when he described how Aon spent two years building the brand from the inside out before taking it out to the marketplace, convinced that their consumer brand is in fact an externalization of their internal values and beliefs: “And then (we) spent about two years building consensus around the company that those characteristics were true, and built credibility around them, so that when we started to talk the talk, the employees and teammates and colleagues would be walking the walk.”

And these are not the only CMO’s that believe that, so do the CMO’s at SAP, Kimpton, Con-Way, and Macys.

2. The numbers show that is a bad idea to keep them separate

The same research study mentioned higher found that companies that show a unified employer and consumer brand can expect the following benefits compared to those that maintain separate brands:

  • 1.6X higher employee satisfaction
  • 3.5X higher employee loyalty
  • 2.7X the number of self-directed employees
  • 1.7X the number of new employees who have a positive impression of the company
  • 1.5X the number of employees who are proud to tell others that they work with their organization
  • 1.5-3X being more attractive to recent college grads

Those numbers are even worse for those organizations that show a different organizational brand during the recruiting process than they really have once an employee joins the company.

It pays to have consistent brands!

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Interesting learnings from CMO’s and CIO’s

September 25th, 2012 francois Posted in CIO 2.0, cmo2.0, Interesting Links | No Comments »

I have recently had the pleasure to interview several CMO’s and CIO’s, including the CMO’s at SAP, Macy’s and Aon and the CIO for the US GSA, and the VP of innovation at IBM. You can listen to the podcasts on the CMO 2.0 site and the CIO 2.0 site.

Here are some common themes that seem to emerge when talking to CIO’s and CMO’s:

  1. Companies with strong shared beliefs and values do not have to compensate for local cultures — for them, the work culture trumps the local culture.
  2. All CMO’s and CIO’s who I have recently interviewed think that understanding employee culture is an important aspect of their success. Many CMO’s are also starting to pay more attention to consumer cultures.
  3. Most CMO’s who I recently interviewed are trying to humanize their brands by having people whose job is not marketing or sales to engage with their customers.
  4. Most CMO’s who I recently interviewed are trying to promote global brands while staying locally relevant.
  5. Every single CMO and CIO who I interviewed is metrics-driven.

If you have suggestions for other CMO’s or CIO’s to interview, please let me know.

 

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Sneak peek at the early findings of the Social Workplace Trust Study

September 19th, 2012 francois Posted in adoption of innovation, announcements, culture 6.0, human resources, Hyper Social Enterprise, Risk intelligence, social media, Strategy | 1 Comment »

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.

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The radical differences between loyalty programs

September 14th, 2012 francois Posted in best practices, buying behaviour, cmo2.0 | 1 Comment »

Loyalty programs feel different from one company to the next, and they probably deliver very different results to those involved.

The reason for this is that most loyalty programs fall into one of three categories: discount-based, free stuff based, or gift based loyalty programs. Let’s review them one by one.

The discount-based loyalty programs

The discount based loyalty programs are based on giving loyal customers coupons with steeper discounts than regular customers can get.

The thing with discounts is that it triggers the pleasure side of the brain — that part of the brain that gets addicted to things. So in order to get the same satisfaction over time, our brain requires bigger stimuli — in this case, deeper discounts are the only thing that will keep us happy. If you bought an item at 50% off, you will never want to buy that item at full price anymore, or even with a 20% discount. Doing so would leave you with the feeling of being cheated. And after awhile the 50% off discounts become routine, and you only get excited if someone offers you 60% or 75% off. And if that someone is an alternative vendor, you might actually switch.

So all in all, and while discount-based loyalty programs may work for awhile, over the long run they suck the profitability out of an industry. They may actually not be a good basis for long term loyalty at all. And if you really think about it, they may actually reward your least profitable customers.

Free stuff based loyalty program

Many loyalty programs fall into this category, including airline programs and credit card programs. The more points you have, the more free stuff you can get and the higher up in status you go. It works really well because people will do anything in order to get something free. Dan Ariely, Behavioral Economist at Duke University has documented this phenomenon — people will do totally irrational things to get free stuff. Most of those programs also have gamification elements, such as leaderboards and levels that give you status — another powerful Human 1.0 motivator that is ingrained in all humans.

But since free is another form of discount, those programs too tend to suck the profitability out of the industry. Plus customers  that acquire free stuff are acting irrationally, and in the end there are often hidden costs for the person who acquired free stuff that they did not really need — think of all those chotchkes that you may have brought from conferences in the past. And except for the leveling part and the status, I am not sure that they result in a lot more word of mouth from your “loyal” customers.

Gift-based loyalty programs

Giving a customer a gift, and in some cases unexpected gifts, in return for their loyalty is the most powerful of all loyalty triggers. Giving a gift to someone triggers one of the most ancient Human 1.0 characteristics — reciprocity. If you give me a gift, I am indebted to you and will be driven to give something back — reciprocity is a reflex, not something we learn from mom and dad or in grade school. A good example of a gift-based loyalty program is the Kimpton Hotel Inner Circle program. When you reach the inner circle, you not only have access to the CEO, but if they have the room they upgrade you free of charge and if they know that you like berries and wine (as I do), they may have a bottle of wine with those berries when you get to your room. They keep surprising you with gifts.

A program like this does not suck the profitability out of the industry. It truly instills loyalty. And it rewards your most profitable customers, not the discount-seekers or totally irrational free-stuff seekers. And because it triggers reciprocity, the word of mouth benefits can be considerable. Look at Kimpton again. According to Steve Pinetti, the SVP of Inspiration and Creativity at Kimpton, 60% of all their first time customers are there because of word-of-mouth — that compares to 20-25% being considered successful in the industry.

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Do we really have to deal with multiple layers of culture at work?

September 11th, 2012 francois Posted in business model innovation, culture 6.0, Hyper Social Enterprise, Strategy, tribalization of business | No Comments »

Many culture scholars would argue that you always have to deal with layers of cultures. There is the gender layer, the religious layer, the ethnic layer, the regional or nationality layer, the work layer, etc. And if you have ever worked with multinational companies you will hear these differences, and especially the nationality one,  pop up every now and then — oh, but that was an American idea, we Brits don’t do it that way.

But does it really have to be that way? Or are they just excuses?

After all, some companies claim that they don’t have to deal with national cultural differences. Francoise Legoues, VP of Innovation at IBM, said that they do not see much corporate culture differences within the various geographical cultural areas. Some other folks I had the pleasure to speak with in the context of our book said the same — they do not have to account for differences in regional or national cultures.

So how does this work?

Culture is an externalization of shared beliefs and values. The way we externalize it is in the form of rituals, language, habits, techniques and behaviors.  What companies claiming to not have to account for local cultures have is a set of corporate values and beliefs that trumps the local cultural belief system. When people are at work they are IBMers first, and not Danish, Spanish or Thai.

So what happens in those companies where people constantly bring up the differences?

It too is part of the corporate culture and not an externalization of the local regional culture. In most cases it’s an excuse to disagree and form factions. It’s a corporate habit – and a bad one. It’s an externalization of a set of shared beliefs held by subgroups of people within the company. It happens when there is no strong corporate set of shared beliefs.

Now of course, nothing dealing with humans will ever be so black and white. There are, for example, some differences in how Asians, who have a more collective culture, fill out their profiles in social environments than Westeners, who have a more individualistic culture. But those differences are subtle and secondary or tertiary in companies with strong corporate cultures and true shared values.

What do you think? Do you buy that?

 

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How to measure culture within an organization

September 10th, 2012 francois Posted in culture 6.0, Hyper Social Enterprise, social innovation | 1 Comment »

Being in the process of writing a book on culture, we quickly got frustrated with the existing models to evaluate and measure culture. We found many models such as the Power Distance Index or OCAI  to be overly simplistic. Plus, they often uncover only the visible parts of culture. We wanted a model and process that would allow us to accurately describe all the subcultures, including the hidden ones.

And so we started developing the Hyper-Social Culture Index. The Hyper-Social Culture index borrows from some of the other models, as there are good elements in all of them.

The index is a maturity model that analyses corporate cultures and subcultures on 8 different axes.

  • Individual Behaviors: Learning vs. Knowing (includes the degree to which people strive to learn from data and results, will engage in debate, will adopt others’ processes, and will study failures)
  • Trust: High trust vs. Low Trust (includes the degree to which people desire trust from the organization and from their peers, and how vigorously people will express disagreement with management)
  • Passion: Passion at Work vs. Day at Work (includes the degree to which personnel feel passion for their daily work, interest in staying with their present employer, pride of belonging to the organization, and interest in taking on new work challenges)
  • Risk Profile: Risk Intelligence vs. Risk Intolerance (includes the degree to which personnel will willingly risk failure in the pursuit of progress and will assume accountability)
  • Organizational Structure: Tribe vs. Hierarchy (includes the prevalence of hierarchical power structures, organizational silos, self-assembled teams, etc., and the manner in which decisions are made)
  • Organizational Beliefs: Human Centric vs. Company Centric (includes customs and norms that demonstrably place people (customers and workers) before organizational interests such as financial gain or products)
  • Problem Solving Culture: System vs. Component (includes practices and attitudes that foster integrative thinking about value creation as opposed to simple task performance)
  • Knowledge Culture: Sharing vs. Hoarding (includes customs and practices that encourage the sharing of information, status, and other elements that the organization deem valuable)

We use surveys, ethnographic interviewing techniques, participant observation techniques, and online business problem challenges to gather the information that can populate the maturity index. So far we have been able to use the model very successfully to help large organizations improve their innovation processes and successfully go through change management programs.

We are continuously refining the model and if you or someone you know could give us feedback we would very much appreciate that.

In a future post I will describe how we use consumer culture modeling to to drive successful new product strategies.

 

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Culture Trumps Strategy

August 27th, 2012 francois Posted in culture 6.0, Strategy | 1 Comment »

One of the most important Human 1.0 characteristic  is culture. According to human evolutionary biologists, humans developed culture (broadly defined as tools, language, rituals, etc.) during the rapid climate swings of the Pleistocene era to deal with those climate changes without having to wait for biological evolution to help us out. So while humans from Lapland and the Sahara Desert were identical 20,000 years ago, transplanting one from one region to the other would surely have resulted in death – the cultures of survival were drastically different. When the Pleistocene era ended about 11,000 years ago, humans realized that they were the only species that could deal with change using culture – and so they started to create their own change and adapted to it through culture. That was driven by evolutionary forces that allowed humans to become the dominant species on earth. Culture is influenced by genetic evolution and vice versa, as Boyd and Richerson (Peter J. Richerson, 2006) argue in one of their great books “Not by Genes Alone: How Culture Transformed Human Evolution.”

Culture – referring to a body of knowledge, rituals, language and beliefs that gets passed around to help us make sense of our surroundings and drive parts of our behavior – can develop and change very rapidly. Take the culture of SMS and that of Twitter – they are both less than a decade old yet very different. They use different languages and different rituals.

Humans create culture in all the different aspects of their lives. There are cultural differences between families, consumer tribes, pop-culture fans, and employee groups. Companies that take the time to understand their customer and employee cultures, or better yet, those that can shape it, can gain game changing advantages over those that don’t. Those that don’t try to understand these cultures can continue to expect high strategic failure rates – like the classic 80% product failure rate that has been plaguing modern companies for decades.

You see – culture trumps strategy. You can develop the best internal or external strategies – change management initiatives, new product development plans, or go-to market strategies –, but if you do not have a good understanding of the cultures in which you will attempt to deploy these strategies, they are almost certain to fail. That does not mean that strategy is not important – it is. It just means that focusing on strategy without understanding the fundamental Human 1.0 cultural characteristics that underlie all successful strategies is like focusing on a recipe without having any understanding of the ingredients.

We have developed a fully comprehensive maturity model to analyze consumer and employee cultures, and I will document that in a future blog post.

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Do you need an ROI to justify becoming a (hyper-)social organization?

August 20th, 2012 francois Posted in Hyper Social Enterprise, Interesting Links, social media | No Comments »

Really — do you? What is the ROI on your phone system, or your conference room?

A recent set of articles such as this one in Digiday or this one in Fast Company tackle the issue of social and ROi — a real interesting topic.

Let’s start by taking a closer look at what it means. In our book, The Hyper-Social Organization, we define companies that are successful at leveraging the social as those that have been able to turn their business processes into social processes. That does not mean slapping those processes on top of social media — but it means powering those processes with people, or humans, and to anchor those processes in what we termed human 1.0 characteristics like reciprocity, fairness, status and power, tribal social instincts and the like. So in a way, succeeding at leveraging the social is allowing your employees to behave like humans with customers, prospects, partners and potential employees. Some call it humanizing your company.

Those companies that are able to humanize their company derive unbelievable benefits compared to those that continue the old ways of behaving in the marketplace — more loyal customers, more positive word of mouth (which leads to twice the amount of new business than traditional marketing programs), and more loyal and passionate employees.

Which brings us back to the ROI question — how do you calculate the ROI of becoming human in the workplace once again? You don’t.

Now what people talk about when they think ROI of social media programs is the ROI associated with traditional marketing programs run on top of social media platforms. But succeeding at leveraging the social in business is fundamentally much more profound than running traditional marketing program like couponing on top of those social platforms.

What do you think?

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Commentary on “Principles for Building a Successful Social Business Strategy”

February 1st, 2012 francois Posted in business model innovation, Hyper Social Enterprise, Interesting Links, Social Messiness | 3 Comments »

The students at Baruch College’s Executive MBA Cohort 31 read our book, The Hyper-Social Organization, and authored a detailed blog post with 9 principles to build a successful social business (http://baruchemba31.blogspot.com/2012/01/principles-for-building-successful.html#comment-form). They invited me to engage in the conversation with them, so here are some of the comments I have on their great piece.

On the first principle — Objectives Should Complement Strengths and Help Overcome Weaknesses –I would add that a social business strategy can humanize a brand and therefore make it more appealing to people. People relate better with other people than they do with organizations, which are a relatively new concept when compared to human evolution ( I wrote an article on this here: http://www.imediaconnection.com/article_full.aspx?id=29788 and also here in terms of how to think of social and brands – http://www.emergencemarketing.com/2011/06/25/creating-unified-customer-experiences/)

On Point II — An Executive Sponsor (VP Social Business) Should Champion Social Business Strategy and Lead Culture Change – I agree. For many (older) companies this will mean a real change management process — and that can be painful.

But I do not agree with Point III — A Single Department Should Own Social Media. I think that when successful, social needs to become part of the fabric of the company. If you give “ownership” to a department then you will end up with one more silo. Customer support needs to embrace it, IT needs to embrace it for their knowledge management and innovation, HR needs to get on board, product development. It is not just marketing and communications. You want to be like IBM, where there is no corporate twitter feed, no corporate blog, but where the employees — all employees — are encouraged to be the face of the company. See my interview with Erin Nelson, the former CMO at Dell where she talks about that http://www.cmotwo.com/2010/03/04/cmo-20-conversation-with-erin-nelson-cmo-at-dell-and-manish-mehta-vp-of-social-media-and-communities/).

I agree with point IV — A Social Media Policy and Process Toolkit is Necessary–, but you cannot be too rigid. Policies need to viewed as guiderails more so than as rigid “do this and DON’T DO THAT or else” type tools. Again, at IBM they developed guidelines, in partnership with the employees, which are encouraging rather than discouraging. The same happened at other companies like Xerox. Because the risks of screwing up are egalitarian (e.g., the CEO is as likely to mess up as the junior communications employee, and the personal risks are as high as the company risks), there is a great opportunity to mitigate risk through education.

On Point V — Technology Platforms and Investment Decisions Must be Identified Early –, I agree, but would caution not to start with technology. My partner, Scott Wilder, who used to run all communities at Intuit, used to say – if your community would not survive in a Yahoo! Group, it will probably not survive anywhere. Companies tend to start with the tools and technology, where they really should start with the tribes and their shared passion, pain and interest. They then need to pay attention at what the day in the life of a user would look like if this were to be successful. It is really product management 101 to determine the features and then select technology that will meet that need.

I agree on VI — A Communications Hub Should be Created by the Social Business Dept –, although many companies give in to the loudest megaphones on social platform and they fix the problems of the individual loudmouths instead of focusing on fixing the problems that affect everyone. A company that truly gets that is JetBlue.

I agree with VII — Trust, Train, and Certify –, although I would say that what you want to do is to allow employees to act as humans again in the work environment — and humans know how to behave as humans. Look at your families and circles of friends — it can get messy, and some people will screw up, but we know how to deal with that. So TRUST is maybe the most important aspect to focus on. Don’t build the system for the 1% of people who will screw up — build it for the 99% who will benefit from it.

On Point VIII — Be Human, Be Transparent – transparency is important, but the more important characteristic is fairness. Sometimes a company cannot be transparent, but as long as that is explained in a fair way, employees and customers will understand.

On Point  IX — Social Analytics Must Drive Key Strategic Decisions — I am not sure that I completely agree. Yes, social analytics are important. But more important is to measure the impact of a social program on a process the same way as you measure the impact of other programs on the process. So for example — if you leverage social programs as part of customer support, measure the impact the same way as you would measure the impact of the call center on customer support; if you use social programs for lead gen purposes, measure the impact the same way as you measure the impact of email marketing, etc.

But the point that you are making about mining the big data that comes with social and digital marketing is a great one. Companies need to stop storing, securing and serving up that data in fancy reports and instead mine it for actionable insights like pricing strategy, marketing strategy, distribution strategy and product development strategies.

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