The Business of Influence – ESOMAR 3D Digital Dimensions Conference 2011

The Business of Influence Philip Sheldrake www.philipsheldrake.com @sheldrake Author of The Business of Influence: Reframing Marketing and PR for the Digital Age, Wiley, 2011 www.influenceprofessional.com Founding Partner, Meanwhile www.andmeanwhile.com 1

The business of influence is brokenThe Business of Influence, Philip Sheldrake, Wiley, 2011http://www.flickr.com/photos/philip_sheldrake/87055500 2

You have beeninfluenced when you think in a way you wouldn‟t otherwise have thought, or do something you wouldn‟t otherwise have done The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/160365265 3

If you‟re in business, indeed any type of organization, then you‟re in the business of influence The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/5629452844 4

//The rise of social media //The info tech explosion //The way we contemplate,3 things design, communicate and execute strategy http://www.flickr.com/photos/philip_sheldrake/104947731 5

ONE//The rise of social media 6

An illustrated history//The rise of social mediahttp://youtu.be/wp2eUSL4oHchttp://www.philipsheldrake.com/2011/01/content-an-illustrated-history 7

The authors of the Cluetrain Manifesto asserted back in1999 that the Internet allows markets to revert to the dayswhen a market was defined by people gathering andtalking among themselves about buyer and sellerreputation, product quality and prices.This was lost for a while as the scale of organizations andmarkets outstripped the facility for consumers tocoalesce. //The rise of social media The Cluetrain Manifesto – http://www.cluetrain.com The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/5724320736 8

We are more influenced by the 150 nearest to us than by the other six or so billion combined//The rise of social mediaThe Business of Influence, Philip Sheldrake, Wiley, 2011http://www.flickr.com/photos/philip_sheldrake/3068588302 9

Perception is realityMay have been a relevantaxiom for 20th Century,but now… Reality is perception The real-time social enterprise must, by nature, be authentic. You can‟t fake it. //The rise of social media Influence Strategy and Execution, Philip Sheldrake, Marketing Magnified eJournal, June 2011, CMO Council http://www.marketingmagnified.com/2011/june http://www.flickr.com/photos/philip_sheldrake/5723483505 10

Social analyticsIf you could go back to the mid-90sand offer a marketer a little box thatcould sit on her desk and let herlisten in on thousands of customerconversations and participate inthose discussions regardless ofgeography or time zone, it wouldappear so far-fetched that she‟dprobably call security. //The rise of social media The Social Web Analytics eBook 2008, Philip Sheldrake http://www.flickr.com/photos/philip_sheldrake/488935955 11

And yet in 2011: “most CMOs pay more attention to markets than individuals.” Key sources to understanding individuals in yellow.//The rise of social mediaFrom Stretched to Strengthened – Insights from the Global Chief Marketing Officer Study, IBM, 2011.http://www.ibm.com/cmostudy2011 12

No organization is an island Everything an organization does occurs in the context of achanging world, in a dynamic interplay with every entity around it Organizations must cultivate a sensitivity to the new dynamic (one that‟s superior to competitors‟) and sharpen their ability to interpret and respond to the myriad communication flows issuing from all sides //The rise of social media Align Your Stakeholder-Facing Functions with an Influence Strategy, Philip Sheldrake, Balanced Scorecard Report, July-August 2011, Vol 13 No 4, Harvard Business Publishing http://www.flickr.com/photos/philip_sheldrake/107864510 13

TWO//The info tech explosion 14

- address book Phones are the most personal - diary of consumer electronic - digital messenger devices. They rank with keys - web browser and money when going out. - games machine They become an extension of - music player their owner and their loss is - video player mourned, literally. - navigator- video & stills camera It keeps you connected with those far away, and disengaged ... and, of course, from strangers nearby. a phone //The info tech explosion The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/87041513 15

The Internet of ThingsA public and private nervous system for the planetElectronic devices(washing machines, air conditioning units and cars)Electrical devices(lighting, electric heaters, and power distribution)Non-electrical objects(food and drink packages, clothes, and animals)Environmental sensors(measuring such variables as temperature, noise, moisture) //The info tech explosion Internetome Conference, London, 2010 The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/488970370 16

Data paucity was a problem of the 20th Century.Big data is the problem and opportunity of the 21st. I believe that a future where so much data is collected about me and owned by others is nothing short of dystopian. We need a new privacy framework. And we need streams banks. //The info tech explosion The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/4326146564 17

Buyer marketing– when individuals can market their needsor desires, either directly or anonymously,via a streams bank or other broker, toorganizations interested in meeting thatneed or desire.What‟s the impact on advertising when wecan pull customized „tenders‟ to us ondemand for anything and everything wecan imagine? //The info tech explosion The Social Web Analytics eBook 2008, Philip Sheldrake http://www.flickr.com/photos/philip_sheldrake/6222250215 18

Web 3.0 – the Semantic Web – is about the Webitself understanding the meaning of all the contentand participation. Indeed, the Web becomes a universal medium for the exchange of data, information and knowledge. //The info tech explosion The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/4324972193 19

Data explosion & Social media“Most CMOs areunderprepared tomanage the impact ofkey changes in themarketing arena.” //The info tech explosion From Stretched to Strengthened – Insights from the Global Chief Marketing Officer Study, IBM, 2011. http://www.ibm.com/cmostudy2011 20

THREE//The way we contemplate, design,communicate and execute strategy 21

Kaplan and Norton developedthe strategy map tool for thealignment of operations withstrategy, and the popular*Balanced Scorecardframework to augment thelagging (financial) indicatorsof business success with non-financial drivers of futurefinancial performance.Useful for dealing withbusiness based on tangibleassets. Essential for those builton intangibles. //The way we contemplate, design, communicate and execute strategy Balanced Scorecard: Translating Strategy into Action, Robert S. Kaplan and David P. Norton, ISBN: 9780875846514 * http://www.bain.com/publications/articles/management-tools-2011-balanced-scorecard.aspx http://www.flickr.com/photos/philip_sheldrake/2773203483 22

Return on investment“The strategy map identifies the “… each investment or initiative isspecific capabilities in the only one ingredient in the biggerorganization‟s intangible assets – recipe. Each is necessary, but nothuman capital, information capital, sufficient. Economic justification isand organization capital – that are determined by evaluating the returnrequired for delivering exceptional from the entire portfolio ofperformance in the critical internal investments in intangible assetsprocesses.” that will deliver the ROI from [the strategic imperative].” And this applies to influence activities too. //The way we contemplate, design, communicate and execute strategy Strategy Maps: Converting Intangible Assets into Tangible Outcomes, Robert S. Kaplan and David P. Norton, ISBN: 978-1591391340 http://www.flickr.com/photos/philip_sheldrake/107865905 23

And yet: “CMOs believe ROI on marketing spend[in isolation?] will be the number one method for determining the marketing function‟s success.” //The way we contemplate, design, communicate and execute strategy From Stretched to Strengthened – Insights from the Global Chief Marketing Officer Study, IBM, 2011. http://www.ibm.com/cmostudy2011 Square brackets added here. 24

The social enterprise //The Business of Influence The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/2772566046 25

„Socializing the enterprise‟ demands more than just procuring some social tools. Itdemands a CEO-led organizational redesign.It demands a new and simple model, devoidof „baggage‟, to think about what we‟re trying to achieve.A framework for all influence activities, for the social media, info tech and business strategy of the 21st Century. //The Business of Influence The Business of Influence, Philip Sheldrake, Wiley, 2011 http://www.flickr.com/photos/philip_sheldrake/3504552777 26

The Six Influence Flows //The Business of Influence The Business of Influence, Philip Sheldrake, Wiley, 2011 27

Comparing market research andcontinuous engagementMarket research Continuous engagementAd hoc or regular intervals ContinuousOne-way (and often needs the carrot Two-way (mutually rewarding)of a prize, gift or payment)Unemotional EmotionalIndependent of loyalty Inculcates brand loyaltyTight focus Wide focusSequential parameters Multi-parametricDesigned to achieve statistical Emphasis on detecting weak signalsconfidence //The Business of Influence The Business of Influence, Philip Sheldrake, Wiley, 2011, Table 5.4 28

Influence-centricityNot hung up on finding „key influencers‟, but rather it‟s about:1. Focusing on the influencedRelated to the emphases of Net Promoter Score (albeit focused on allstakeholders that have been influenced or influenced others, rathercustomers that would recommend us).Outcome rather than output oriented.2. Tracing influenceUnderstanding and learning from how influence has happened. //The Business of Influence The Business of Influence, Philip Sheldrake, Wiley, 2011 The term „the influenced‟ means those who have done something they otherwise wouldn‟t have done (e.g. buy your product) and is not a contraction of „the positively influenced‟, i.e. those who have come round to our point of view, as it might be in more casual parlance. 29

The Influence ScorecardHow can we systematically learn from and manage influence flows?How do we define, develop, and execute a consistent and coherentinfluence strategy?How do we prioritize investments in influence-related human,information, and organizational capital?Kaplan and Norton‟s strategy map tool and Balanced Scorecardframework are well suited to these efforts. //The Business of Influence The Business of Influence, Philip Sheldrake, Wiley, 2011 30

The Influence Scorecard /2The Influence Scorecard serves as both the methodology for defininginfluence strategy and the tool for executing it.It‟s a subset of the Balanced Scorecard, containing all the influence-related objectives and metrics extracted from their functional silos.Helps management ensure that the potential to influence and beinfluenced is exploited cohesively and consistently throughout theorganization. //The Business of Influence The Business of Influence, Philip Sheldrake, Wiley, 2011 31

In conclusionToday, influence activities are: – Spread, uncoordinated, across functional silos – Encompass only some aspects and subsets of the Six Influence Flows and the Influence Scorecard – Defined in the context of 20th Century technology, media, and articulation of and appreciation for business strategy. //The Business of Influence 32

In conclusionTomorrow, your influence strategy must:– Take best advantage of social media, new info technologies and best practice performance management– Integrate marketing research, systematically– „Socializethe enterprise‟, systematically– Drive business performance. //The Business of Influence 33

The ease and effectiveness with which we manage and learn from influence flows is integral to the ways all stakeholders interact with organizations to broker mutually valuable, beneficial relationships. //The Business of Influence The Business of Influence, Philip Sheldrake, Wiley, 2011http://www.flickr.com/photos/philip_sheldrake/3820770698 34

The Business of Influence: ReframingMarketing and PR for the Digital AgePhilip Sheldrake, Wiley, May 2011ISBN 978-0470978627www.influenceprofessional.com#infpro@sheldrake 35

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The Business of Influence – ESOMAR 3D Digital Dimensions Conference 2011

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