THE                                  Letter from Jeff Dachis 4THE SOCIAL BUSINESS JOURNAL                                 ...
2                                                                                         THE SOCIAL BUSINESS JOURNAL   IS...
4                                                                                              THE SOCIAL BUSINESS JOURNAL...
6                                                                                                           THE SOCIAL BUS...
8                                                  THE SOCIAL BUSINESS JOURNAL   ISSUE 01 Q2 2012   9+ SOCIAL BUSINESS PRO...
10                                                                                                 THE SOCIAL BUSINESS JOU...
+ X P L A N A T i O N : AT T R I B U T E S O F A S O C I A L LY O P T I M I Z E D B U S I N E S S                         ...
14                                                                              THE SOCIAL BUSINESS JOURNAL   ISSUE 01 Q2 ...
16                                                                                                         THE SOCIAL BUSI...
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Dachis Group Social Business Journal - Issue 01
Upcoming SlideShare
Loading in...5
×

Dachis Group Social Business Journal - Issue 01

17,071

Published on

The quarterly journal of social business thought leadership, published by Dachis Group.

Published in: Business, Technology
1 Comment
25 Likes
Statistics
Notes
No Downloads
Views
Total Views
17,071
On Slideshare
0
From Embeds
0
Number of Embeds
16
Actions
Shares
0
Downloads
314
Comments
1
Likes
25
Embeds 0
No embeds

No notes for slide

Transcript of "Dachis Group Social Business Journal - Issue 01"

  1. 1. THE Letter from Jeff Dachis 4THE SOCIAL BUSINESS JOURNAL US CELLULARs SHERRI MAXSON 8 EVERYTHING IS A SERVICE 14 SOCIAL BUSINESS BY DESIGN 30 SOCIAL BUSINESS JOURNAL tw ay pl it boo te k r THE TWITTER ISSUE 01 · Q2 2012 PLAYBOOK P.22 Everything marketers should know about launching, managing, and measuring brand efforts on Twitter. Your free chapter, “EARNED OPPORTUNITIES,” starts on...
  2. 2. 2 THE SOCIAL BUSINESS JOURNAL ISSUE 01 Q2 2012 3 MOVE YOURTHE SOCIAL STRATEGYSOCIAL + CONTACT US FORWARDBUSINESS DACHIS GROUP 515 Congress Avenue Suite 2420 8 MAR 18 APR 9 MAY 23 MAY 21 JUN 26 JUL 12 SEP Austin, Texas 78701 AUSTIN SHANGHAI RIO DE JANEIRO BERLIN LONDON SINGAPORE NEW YORKJOURNAL USA AMERICAS: +1 512 275 7825 EUROPE: +44 0 20 7357 7358 www.dachisgroup.com sbj@dachisgroup.com JOIN US AT A 2012 DACHIS GROUP SOCIAL BUSINESS SUMMIT. The Summit brings together practitioners,+ DEPARTMENTS + ISSUE 01 · Q2 2012 thought leaders, and industry experts for a series of keynotes focusing on Performance PUBLISHER CONTRIBUTORS 4 MESSAGE FROM 5LETTER FROM Jeffrey Dachis Katherine Bish John DeOlivera Brand Marketing, Connected Company, THE CEO By Jeffrey Dachis THE EDITOR By Peter Kim EDITOR IN CHIEF Dion Hinchcliffe Peter Kim Erik Huddleston and Social Business Intelligence. Our goal Lindsey Kirkbride is for attendees to leave the Summit armed 6 BLOGS & BOOKS A roundup of good reads 43 SOCIAL BIZ INSIDER By Susan Scrupski MANAGING EDITOR Dave Gray CREATIVE DIRECTOR Brian Kotlyar Susanne LeBlanc Noah MacMillan David Mastronardi with tactical advice and empowered to move their social strategy forward. Bill Keaggy Scott Matthews Cynthia Pflaum SENIOR ILLUSTRATOR Ray Renteria+ FEATURES Chris Roettger Carly Roye SPEAKERS INCLUDE Zoë Scharf The Social Business Summit is by invitation only. Jeremiah Owyang Bonin Bough Tiffany LaBanca Steve Furman 8 OPERATIONS MANAGER Christoph Schmaltz ALTIMETER GROUP KRAFT FOODS NEWS CORP. DISCOVER SHERRI MAXSON Lara Hendrickson Susan Scrupski Request an invitation David Armano Adriana Knackfuss Dave Gray FINANCIAL SERVICES INTERVIEW PRINT MANAGER Jen van der Meer David Vordtriede at socialbusinesssummit.com EDELMAN DIGITAL THE COCA-COLA DACHIS GROUP Social at US Cellular COMPANY Jeff Dachis Lisa Vorst Brian Williamson Arnaud Frade Clara Shih DACHIS GROUP #SBS2012 TNS (APAC) Sam Flemming HEARSAY SOCIAL 12 PRINTER COVER ILLUSTRATION CIC Lee Bryant Sandy Carter Dion Hinchcliffe ATTRIBUTES OF A The Composing Room St. Louis, Missouri USA Chris Roettger IBM Sherri Maxson DACHIS GROUP DACHIS GROUP SOCIAL BUSINESS Melissa Lavigne- US CELLULAR Peter Kim DACHIS GROUP A visual XPLANATiON ISSN: 2166-3742 Ted Stanton Sanjay Mehta Delville SOCIAL NBC UNIVERSAL IBM WAVELENGTH 14 ISSUE HASHTAG: #SBJ01 Donna Li Alistair Rennie Erik Huddleston EVERYTHING RENREN INC. IBM DACHIS GROUP IS A SERVICE By Dave Gray + ABOUT SBJ 22 The Social Business Journal is a free THE TWITTER quarterly publication produced by Dachis Group. If you’d like to receive future issues, PLAYBOOK please contact us at sbj@dachisgroup.com. By Brian Kotlyar 30 Comments? Questions? Suggestions? We’d 36 love to hear your feedback on the first issue SOCIAL BIZ SUPER BOWL of the SBJ. Visit dach.is/01-sbj to let us BY DESIGN OF BRANDS know what you think. A book excerpt By Erik Huddleston ©2012 Dachis Group
  3. 3. 4 THE SOCIAL BUSINESS JOURNAL ISSUE 01 Q2 2012 5“Everything that can be social will be.”+ MESSAGE FROM THE CEO: JEFFREY DACHIS + LETTER FROM THE EDITOR: PETER KIMWelcome to the Social Business Journal Here’s another way to work out loudA vehicle for deliberate, intentional transformation In real life, online — and now in printIam thrilled that you have joined us in these pages to discuss SocialBusiness and the many inspiring processes and engagement programs will exceed their strategic goals and drive superior financial performance. D achis Group enters its fifth year this spring and along the way we’ve experimented with a variety this new vehicle to our communica- tions mix as a complement to digital and physical interactions.ways companies are evolving by inte- I couldn’t be more excited for the of channels to communicate and In each issue of the Social Busi-grating the power of social technology Social Business Journal to chronicle engage our ecosystem in social busi- ness Journal, we’ll be drawing on ourinto their DNA. companies making powerful social ness discourse. When we launched research in visual thinking, business I firmly believe that we are at the shifts in order to enhance their busi- our company website in October advisory, and big data. We will alsocrux of the largest shift in the com- nesses in ways that are more scalable 2009, we created a stir by “work- be highlighting the stories of profes-munications landscape in the history and efficient than ever before. ing out loud” and publishing our sionals who are “in the trenches” andof mankind. The digital revolution Thank you in advance, I’d love to aggregated activity stream on the making transformation a reality, ashas democratized the tools of self- this connection and engagement is hear your thoughts @jeffdachis. n home page, showing when someone pects, including The Collaboratory well as giving industry thought lead-expression, creating a culture of trackable, traceable, and measurable. sent an email and to what domain, (dachisgroup.com/blog), Twitter ers a platform to share their insights.sharing, connection, participation and There has never been a more uploaded a file to Basecamp, posted (@dachisgroup), and Facebook I hope you enjoy this issue andengagement. valuable opportunity for businesses to a message to Yammer, published a (facebook.com/dachisgroup). thank you for reading. Your feedback Social Business, and by proxy interact with their key stakeholders, blog post, and so on. But this year we’re launching a is encouraged and appreciated. nmeaningful, authentic, and trans- driving valuable insights that were Jeffrey Dachis In 2010, we launched our Social new communications vehicle that’s aparent engagement at scale creates once unavailable in traditional one- Chief Executive Officer, Business Summit series, which will bit of a throwback — a print collec- Best,exponential and never before seen op- way marketing approaches. Organiza- Chairman and Founder, take us to seven cities this year: tion of thought leadership focusedportunities for businesses. Moreover, tions that embrace social technology, Dachis Group Austin, Shanghai, Rio de Janeiro, on social business. I see this as a Berlin, London, Singapore, and reflection on the nature of social New York (for more information, business — when done properly, it Peter Kim visit socialbusinesssummit.com). extends across channels, functions, peter.kim@dachisgroup.com We’ve also used the usual sus- and constituencies. So we’re adding +1 512 275 7825
  4. 4. 6 THE SOCIAL BUSINESS JOURNAL ISSUE 01 Q2 2012 7+ B L O G R O U N D U P : D A C H I S G R O U P. C O M / B L O G + WHAT WE’RE READING: BOOKS, BLOGS, ETC.The best of the Collaboratory “The Social Organization” By Anthony J. Bradley and Mark P. McDonald “Beautiful Evidence” By Edward R. Tufte “Everything Is Obvious” By Duncan WattsEDITED BY CARLY ROYE Jacob Heberlie Anne Bartlett-Bragg Maia Garau Designer Managing DirectorILLUSTRATIONS by CHRIS ROETTGER Senior Consultant St. Louis Sydney Amsterdam @hebchop @AnneBB @garauUse social tools and 4 key steps to Responsive design: We want you! To Insights across Deeper than fanemployee expertise being a connected The future of content join the sketchnote your entire social counts: Socialto solve problems. company. consumption. revolution. presence? Yes. metrics CMOs love. SMART SMART WEB WEB DESIGN 72 DESIGN Business Customers SMART WEB DESIGN 47 63 -7 0 8 -15 15 - SBI + ? By Dion Hinchcliffe By Cristoph Schmaltz By Lindsey Kirkbride By Bill Keaggy By Erik Huddleston By Jen van der Meer EVP Strategy Consultant UX Designer Creative Director Chief Technology Officer EVP Managing Director Washington D.C. London Portland St. Louis Austin New York @dhinchcliffe @christoph @lindseyk @keaggy @ehuddleston @jenvandermeerT he 21st century has brought re- markable change to the world B eing a genuine social business means more than having an online pres- ence, but most companies don’t have the T he number of people using their mobile devices for web browsing is growing at a remarkable rate, and it’s B ill Keaggy wants you to join the sketchnote revolution. The DG E ven the largest social businesses share a similar challenge of clearly under- U p till now, the tools available for companies to measure its socialof business, but perhaps none greater Creative Director shares his answer for standing their social presence, and how performance have been limited to listen-than the push towards systems of know-how to change. Christoph Schmaltz time for designers to catch up. Recently, freeing yourself from mind-numbing successfully or unsuccessfully their social ing programs and experience enhance-engagement. Dion Hinchcliffe explains explains how businesses have slowly it’s been a common practice to build conference notes, by creating something media accounts are performing. CTO Erik ment. Too many community managersthat even though a business is rooted distanced themselves from their custom- an individual website for each different that you’ll be proud to share, and eager to Huddleston explains how DG’s Social think their primary focus should bein outdated systems of record, it can ers and hindered their success in the browsing device (desktop, mobile, tablet), look back on. Instead of simply transcrib- Portfolio Insight (SPI) tool is clearing a on fan growth, but the number of fansstill use new social tools to open up process. He offers four key concepts to but this often leads to unnecessary work ing words onto paper, visual note taking lot of that confusion by allowing compa- a company has is hardly an accuratethe conversation with customers, help clients easily understand the path to and an inconsistent customer experience. allows you to arrange things the way your nies to easily examine and manage their assessment of their social success. Jenand use its employees’ expertise to becoming a truly connected business. By Lindsey Kirkbride discusses responsive mind naturally does, and builds a greater multiple social accounts. With the SPI, van der Meer explains how DG’s socialbest solve problems. The transition getting rid of outdated company policies web design and mobile first thinking as connection between you and the content. businesses can analyze their social pres- performance tools dig much deeperprocess can be intimidating, but when and conservative hierarchy structures, the future for building websites. By build- You don’t have to be an artist to do it ence with highly organized data, and gain into a company’s social performance,a company starts distancing itself a company can use social media tools ing the mobile site first and making small either. Scribbled sketches can be just as insight into the overall sentiment of their measuring everything from brand love tofrom old transactional systems, it to connect to its client base, bond its changes from there, companies will spend effective as ingenious illustrations. Bill of- customer base. By seeing the entire social brand awareness and advocacy. By tak- can then connect to its employees, and give its far less time and money on fers some practical tips for picture, a company can be ing a richer look into these customers and business customers real people to design, and, in the process, getting started and shares more in tune with its cus- different aspects of social, partners in a more talk to. Bottom line, people will create a much more some inspirational sketches tomers and less consumed a company can maximize cost-effective and want to connect with other user-friendly experience for of his own. Note taking with sifting through the their outcomes and outper- human way. people, not companies. its customers. never looked so beautiful. social weeds. form the competition.Read the entire blog post at dach.is/j7sLDb Read the entire blog post at dach.is/oqIHok Read the entire blog post at dach.is/t5toOm Read the entire blog post at dach.is/rwnlDL Read the entire blog post at dach.is/vdnACa Read the entire blog post at dach.is/wHw1o9
  5. 5. 8 THE SOCIAL BUSINESS JOURNAL ISSUE 01 Q2 2012 9+ SOCIAL BUSINESS PROFILE: SHERRI MAXSONA SOCIALBUSINESSJOURNEYAs the first Director of Digital Marketing and Socialat US Cellular, Sherri Maxson is responsible for the$4.2 billion wireless services firm’s social businessjourney. Dachis Group’s Peter Kim, David Mastronardi,and Cynthia Pflaum sat down with her to discusswhere she’s been and where she’s taking US Cellular.PHOTOGRAPHY by KATHERINE BISH
  6. 6. 10 THE SOCIAL BUSINESS JOURNAL ISSUE 01 Q2 2012 11Social Business Journal: Let’s start MARCH 2012 frastructure needs to be built, and 1at the beginning. Why did you make 147 programs created. All of these must 100 happen without disrupting exist-the decision to join US Cellular? 200 ing processes that already generateSherri Maxson: Being in the Chi- 300 positive returns for the company.cago area, I was familiar with 400 SEPT. 2011 The key is how to make business as 561 usual better by rearchitecting initia-U.S. Cellular’s strong product and 500award-winning customer service. I 600 tives back into the business.joined U. S. Cellular in December 7002010 and was excited to be part a Providing customer service in social 800company that believed in a dynamic SEP OCT NOV DEC JAN FEB MAR channels creates outcomes tradi-culture, where associates are em- tionally associated with marketing.powered to provide the best experi- Maxson launched US Cellular’s social customer service initiative in September 2011. These two organizations are nowence to customers and prospects. A month later the company’s Social Business Index score (socialbusinessindex.com) much more tightly coupled. All partsOver the past four years through my began rising, and so far has improved almost 400 spots. (The early dip likely is the of the business need to collaborate result of multiple companies with better SBI rankings getting added to the Index, and work towards shared businesspersonal experience and the rise of causing US Cellular’s rank to temporarily suffer.) GRAPHIC by ZOë SCHARFsocial, I’ve learned how critical it is outcomes, which are amplified byto have the right culture in place for social. Meanwhile, the connectionssocial business success. between marketing and sales chan- complete infrastructure in place to thoughtful about how participation Part of Team US Cellular, from left to right: Jessica Masterson, Social Media Manager; nels start to impact everything andHow did your role come about at take full advantage of business op- should work, activating specific Sharif Renno, Manager, Social Media, Sherri Maxson, Director Digital Marketing & Social; create new opportunities.U.S. Cellular? portunities in social, which led to the business areas to engage on behalf and Sonny Gill, Social Media Manager. PHOTO BY KATHERINE BISH creation of my position. of our brand. I worked with HR to Looking forward, what’s next inI filled a role that was new to the create a policy that everyone could social business at U.S. Cellular?company, created to capitalize on Scalability is certainly a key live with, with an agreement that sors were bought-in to our progress. How did you measure your results?emerging opportunities in digital and challenge as companies move we would iterate rapidly as needed. Communication and cross-depart- Now, it’s all about activating the so-social media. Before I started, the towards social business. Where mental collaboration was critical We are measuring outcomes in a cial business platform. We’ve calledcompany had gotten familiar with did you start solving this issue Sounds like you had some good to staying on track with the plan. variety of ways. Some of the ones our programs “betas” so far to helpsocial media through a Facebook for U.S. Cellular? momentum. Where did you take it In addition, U.S. Cellular takes the I can share publicly include the get people into a test-and-learnpresence initially created as part from there? customer experience very seriously. number of issues we are resolving mentality to encourage participa-of an integrated marketing cam- One of the first building blocks we We had to be sure to not disrupt through social channels. From our tion and feedback. We’re ready to We needed to get executive buy-in for existing processes that were already initial baseline, we have increasedpaign. When the page went live, the needed to put in place was a com- apply lessons learned within general making social business a reality. So I working for us, which required train- our average volume handled bycompany engaged using a volunteer prehensive strategy, supported by operational channels, as well as created an internal “mini-roadshow” ing on how to use program-specific 625%. Another metric we areforce of responders from across the policy. We had many points of view marketing vehicles and channels. to meet with executives and explain tools and engage on-brand. tracking is social business perfor-organization, whose efforts went on social participation. Some people how our policy and social business mance as measured by the Socialabove and beyond their day jobs. felt everyone should be participating This is the most rewarding thing I’ve plan would enable scale. Our orga- One of the first programs we Business Index. We are also look-This group, fully supported by execu- instantly and generating brand love done professionally, in perspective nizational structure would centralize launched was a national sales pro- ing at the impact of taking formerlytive leadership, comprised about 55 everywhere in social media, similar of watching the evolution of digital operations in marketing, with efforts gram on Facebook and Twitter. We private conversations public andassociates. While the team’s efforts to Zappos. Others were focused on from 1995 to today. It’s not easy; a coordinated by a cross-functional started listening for relevant men- the amplification we are seeing indisplayed plenty of passion, scal- minimizing risk by limiting involve- lot of experts talk about what’s pos- center of excellence. We would focus tions of industry and brand topics, social channels. We believe thatability continued to be a challenge. ment to just my team. Somewhere sible, but actually getting it done is initially on sales and service, two then engaged users proactively this is a perfect venue for gettingAs new opportunities emerged, the in between, there was a belief the hard part. It’s fun, challenging, business areas where we could show in conversation. At one point, we our customer focus, one of ourcompany realized it didn’t have a that we should be deliberate and and important to the future of busi- a tangible business impact. started a prospect conversation on core strengths, displayed out in the ness. I’m fortunate to have found a Twitter with a person who voiced open. The organization has been culture at U.S. Cellular that lends“ So you had a plan in place. How a complaint about her existing car- highly supportive of social business itself naturally to being a social Customer service is the new did you turn that plan into reality? rier. After we started engaging, her activities and we communicate business, which helps connect the current carrier joined the conversa- wins regularly within the company. dots between the power of business marketing. All parts of the We started by bringing in outside perspectives to help shape our pro- tion, asking her to stay. After some and people. n public back-and-forth on Twitter, business need to collaborate grams and fine-tune our initiatives. We then started putting more detail we ended up winning the busi- What lessons stand out at this point in your journey? Peter Kim is Dachis Group’s Chief and work towards shared around requirements to operational- ize our inter-departmental programs, ness. Our front line associates were well-prepared with the right tools When you are implementing enter- Strategy Officer and is based in Austin, where David Mastronardi is business outcomes, which working with key business area and training, all we had to do was identify the opportunity and they prise social business, there are so many things that need to be done. an Engagement Manager; Cynthia Pflaum is a Consultant in the New stakeholders. As we progressed, are amplified by social. we made sure that program spon- were successful. You need contracts in place, in- York office.
  7. 7. + X P L A N A T i O N : AT T R I B U T E S O F A S O C I A L LY O P T I M I Z E D B U S I N E S S 13 BUSINESS BENEFITS FOR: SOCIAL BUSINESS IMPACT ON THE GLOBAL DEFINING ATTRIBUTES Marketing Sales R&D Customer Service Customers IS A MARATHON — WORKFORCE: OF THE SOCIALLY- Better connected More playful, faster, Fluid and continuous More agile, innovative More caring, direct, Have a say and NOT A SPRINT: EVOLVED BUSINESS: responsive, stream- relationships with decreased dev accessible — know it — they feel lined and direct cultivated online cycles, increased opps embraces and deals the authenticity Break down barriers REAL-TIME CREATIVE for outsourcing with mistakes COLLECTIVE TRUSTED ST ART Manage cultural differences AUTHENTIC ENCOURAGING CONNECT MORE DOTS: Easy to find experts COHESIVE OPEN KEY DIFFERENCES VERSUS Alignment & perspective COLLABORATIVE R&D SALES TRANSPARENT TRADITIONAL BUSINESS: Higher performance Greater achievement CUSTOMER-CENTRIC Become more dynamic ! CRM Greater ERP MKTG acceptance PAINS FELT BY Team-oriented, of risk, failures ORGANIZATIONS ATTRIBUTES OF A SOCIALLY OPTIMIZED BUSINESS much flatter: Clear guidelines Exists beyond THAT ARE NOTallow everyone to the org chart SOCIALLY-EVOLVED: speak openly on Greater businessbehalf of company FEEDBACK METRICS TRENDS ALERTS · Low employee engagement What’s different? Who benefits? visibility: Info flows · Opaque and misaligned vertically and horizontally · Lack of creativity Democratization · Keep reinventing the wheel of information Comfortable with outward-facing The social business is alive with dogma, progressive organizations · Can’t be nimble · Can’t capitalize on resources communication energy and big ideas — you are waking up to the disturbing truth · At competitive disadvantage Leaders and experts might call it a Renaissance that they’ve squeezed all the creativity · Slow to change can easily emerge for the information age. out of their business. When companies · No perspective on future After decades of mechanistic, embrace organic, passionate, socially- dehumanizing, process- savvy initiatives, they blossom. NEW BEHAVIORS IN INDIVIDUALS: oriented management Who benefits? Everyone. · More open to sharing Culture that’s more comfortable communicating, collaborating INTELLIGENCE & INSIGHTS VIA DASHBOARDS: · Introverts become extroverts HELLO Change Content MY ROLE IS · Diverse audiences join together · Thinkers can release thoughts EASILY ACCESSIBLE NEW ROLES: Agent Editor EER ” · Pride in being “the expert” · More questioning TECHNOLOGIES: “EMERGEN · Less risk-averse Video Mobile & IAL SOC Transparency & trust ·Things get done because people want to versus are Blogs Wikis IM told to Shorter decision- making cycles · Enables all to ask questions Collaborative Community and get answers Consultant Manager MASSIVE SHIFT Attitude change KNOWLEDGE VS SOCIAL Authenticity Overall improvement in individuals in business practice FROM “ME” TO “WE”: MANAGEMENT BUSINESS: is everywhere WE creates long-term · People “work out loud” impact on culture Structured, not very useful · · Gather 1st, organize 2nd · Ideas are crowdsourced Capture of information · · Capture of interaction · Openness is rewarded Taxonomy of knowledge · · Folksonomy of knowledge Top-down · · Community BUSINESS BENEFITS FOR: Finance Line Managers Partners More innovative and Proactive, have faster More connected transparent, can allocate turnaround, work out and efficient, can resources better, give the loud, increase employee be included in department a human face engagement conversations XPLANATiON BY BILL KEAGGY & NOAH MACMILLAN
  8. 8. 14 THE SOCIAL BUSINESS JOURNAL ISSUE 01 Q2 2012 15+ SOCIAL BUSINESS FEATURE: THE CONNECTED COMPANY EVERYTHING BY DAVE GRAY is a service The emerging service economy will require business and society to do some fundamental restructuring. The organizations that got us to this point have been hyper-optimized into super-efficient production machines, capable of pushing out an abundance of material wealth. Unfortunately, there is no way to proceed without dismantling some of that precious infrastructure. The changes are already underway. PHOTO courtesy THE U.S. THE GREAT BIG SHIFT-RESET. In The Power of Pull: How Small Moves, LIBRARY OF CONGRESS Smartly Made, Can Set Big Things in Motion, ILLUSTRATIONS & CHARTS John Hagel and John Seely Brown observe by DAVE GRAY that return on assets, the measure of how ef- ficiently a company can use its assets to gen- erate profits, has steadily dwindled to almost a quarter of what it was in 1965. They argue that ever-improving digital infrastructure and social networks are causing profound social change that increases competitive intensity. Since this turbulent environment shows no signs of stabilizing, they say, the only sus- tainable competitive advantage is the rate at which a company can learn.
  9. 9. 16 THE SOCIAL BUSINESS JOURNAL ISSUE 01 Q2 2012 17 A SERVICE ECONOMY. saturated and it gets more and more difficult to sell them more This digital revolution is ushering in all kinds of new ways to stuff. By 1960, 70% of families owned their own homes, 85% deliver, combine and mix up services, resulting in all kinds of had a TV, and 75% had a car. enticing combinations: streaming music, following other people’s As markets became saturated with material goods, produc- book highlights, renting strangers’ apartments or cars by the day, ers found a new way to apply the principle of mass-production Since 1960, services have dominated US employment. To- negotiating bargain prices at 4-star hotels and much more. in mass-marketing. With a TV in nearly every house, producers day’s services sector makes up about 80% of the US economy. had a direct line to customers. Customers became known as Services are integrated into everything we buy and use. Nine of every ten companies with fewer than 20 employees are in URBANIZATION. In addition, there is an increasing trend to- consumers, because their role in the economy was to consume ward urbanization. Throughout the world, city populations are everything that producers could make. Increasingly, this pro- services. Companies like GE and IBM, who started in manufac- growing much faster than rural populations. We are becoming ducer-consumer economy developed into a marketing-industrial turing, have made the transition and now make the majority of an urban society and living more urban lifestyles. complex dependent on consumer dissatisfaction and the mass- their money in services. Fifty percent of the world’s population today lives on two per- creation of desire for the next new thing. What’s driving the move to services? Three things: Product cent of the earth’s crust. In 1950 that number was 30%, and by New technologies of communication have splintered the saturation, information technology, and urbanization. 2050 it is expected to be 70%. channels of mass-communication into tiny fragments. It’s no Why are people moving to cities? Because cities are where longer possible for mass-marketers to reach out and touch all of the action is. There are more jobs, and more kinds of jobs, avail- In The Great Reset: How New Ways of Living and Work- their customers at once. The megaphone is gone. And with the able in cities, and even when the same job is available in theing Drive Post-Crash Prosperity, Richard Florida points to a rise of social networks and peer-to-peer communication chan- country and the city, the job in the city pays more. Urban work-shift from an economy based on making things to one that nels, every customer can have their own megaphone. ers make, on average, 23% more than rural workers. And theis increasingly powered by knowledge, creativity, and ideas: To many mass-marketers this feels like a chaotic cacophony more highly skilled you are as a worker, the more you stand to “Great Resets are broad and fundamental transformations of voices, and it’s hard to be heard in the crowd. But to most cus- gain financially by moving to a large city.of the economic and social order and involve much more tomers it’s an empowering feeling to have a voice, to be heard. Also, if you happen to get laid off or your company goes out ofthan strictly economic or financial events. A true Reset trans- Even if a company ignores your complaint, the world will hear, business, as a worker it’s much easier to find a new job withoutforms not simply the way we innovate and produce but also and if companies don’t respond they will eventually feel the pain, having to pick up and move.ushers in a whole new economic landscape.” as customers find new places to go to get what they want. As work becomes more complex and more skills are required, Jeffrey Immelt, CEO of General Electric, agrees. The producer-driven economy is giving way to a new, cus- cities become more attractive to companies too, because that’s “This economic crisis doesn’t represent a cycle. It repre- tomer-centered world, where companies will prosper by develop- where the skilled workers are. Cities pack a lot of people andsents a reset. It’s an emotional, raw social, economic reset. ing relationships with customers by listening to them, adapting businesses into a relatively small space, which is good for ser-People who understand that will prosper. Those who don’t and responding to their wants and needs. vices companies in several ways.will be left behind.” The problem is that the organizations that generated all The good news is that although resets are initiated byfailures — sometimes catastrophic failures, like we have this wealth were not designed for this. They were not de- signed to listen, adapt and respond. They were designed SPACE: People living in small city apartments just don’t haveseen in the mortgage system — they also lead to new pe- a lot of room for products, and because they are making more to create a ceaseless, one-way flow of material goods and money than their rural counterparts, they tend to spend moreriods of growth and innovation, built on new systems and information. Everything about them has been optimized for on services. Why take up space with a washer and dryer wheninfrastructure. Whether you call it the Big Shift, the Great Reset, or thegreat big shift-reset, there’s little doubt that a fundamental this one-directional arrow, and product-oriented habits are so deeply embedded in our organizational systems that it will be PRODUCT SATURATION. When people already have most of there’s a laundry service right down the street? difficult to root them out. the material goods they need, they will tend to spend more ofeconomic restructuring is underway. There will be winners their disposable income on services. Increasingly the products It’s not only companies that need to change. Our entireand there will be losers. that companies want to sell us are optional; they offer not func- society has been optimized for production and consumption on tionality but intangible things like status, pride of ownership, theAN AGE OF ABUNDANCE. a massive scale. Our school systems are optimized to create good cogs for the corporate machine, not the creative think- new color that’s in this year, and so on. ers and problem-solvers we will need in the 21st century. Our And products, we have found, can not only make life easier, government is optimized for corporate customers, spending its they can be a burden. When you own a house, you have to As we stand on the verge of a new era, it’s easy to disparage spend money to fix the roof or the plumbing. Where’s the fun in money to bail out and protect the old infrastructure insteadthe old-school industrial economy. But let’s not forget that the that? And moving can be a big hassle when you have a truckload of investing in the new one. Our suburbs are optimized to in-industrial economy gave us an abundance of material wealth we of stuff to lug along with you. crease consumption, with lots of space for products and plentynow take for granted, including many things that were unavail-able — and unimaginable — in previous centuries. Economist J. Bradford DeLong points out that in the 1890s, of nearby places where we can consume more stuff, including lots of fuel along the way. INFORMATION TECHNOLOGY. In addition, another, post- While workers are being laid off in many industries, technol- industrial revolution is delivering a new kind of abundance —even the richest of the rich could not go to the movies or watch an abundance of information, along with networks and mobile ogy companies like Facebook and Google are suffering from criti-football on TV, and traveling from New York to Italy took at least devices for moving that information around, and much faster cal shortages, struggling to fill their ranks and depending heavilya week. In 1836, the richest man in the world, Nathan Roths- processing that allows us to do more interesting kinds of things on talent imported from other countries that place a higher prior-child, died of a common infection that would have been easily with the information we have. ity on technical education.curable with modern antibiotics. And while at first this shift was driven by the kinds of things “The whole approach of throwing trillions of public dollars at The material abundance we all enjoy was made possible by we traditionally think of as information containers, like docu- the old economy is shortsighted, aimed at restoring our collec-an industrial economy that focused primarily mass- ments and images, now it has exploded to include many things tive comfort level. Meaningful recovery will require a lot moreproducing material goods. The philosophyof mass production was based on Henry than government bailouts, stimuli, and other patchwork mea- sures designed to resuscitate the old system or to create illusory, that were previously undocumented. Your network of friends and acquaintances, the efficiency of your car’s engine, the things you DENSITY: Urban density makes it more attractive for compa-Ford’s big idea: If you could produce do, the places you go, the things you buy, what you think about nies to provide a wide variety of services. For example, a cable short-term upticks in the stock market, housing market, or car company can wire a city apartment building and serve hundredsgreat volumes of a product at a low them, and even your random throwaway thoughts are being cap- sales.” —Richard Florida of households for a fraction of the cost to do the same thing incost, the market for that product tured in Foursquare check-ins, tweets, status updates, photo and We no longer live in an industrial economy. We live in a ser- a suburb or rural area. Taxis find customers quickly in dense-would be virtually unlimited. In video uploads and other kinds of “data exhaust” that you may not vice economy. And to succeed in a service economy we will need ly-packed urban centers. One city block can support severalthe early days his idea held true, even know you’re generating, simply by using your phone and to develop new habits and behaviors. And we will need new specialty stores and a variety of restaurants. And in a reciprocalbut eventually, every market gets other devices. organizational structures.

×