Transforming Competitive Advantage with Social Media

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This was the presentation used for the 2010 Keynote presentation at the CIO Year Ahead Summit in Palm Springs

This was the presentation used for the 2010 Keynote presentation at the CIO Year Ahead Summit in Palm Springs

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  • Top 4 have not changed – 5 and 6 swapped – Reduce customer acquisition cost almost doubledImprove knowledge management was not asked in earlier years
  • Big disconnects here between key processes supported and who is actually running the community. There’s a lot of learning about tribes that needs to take place during these community encounters, and critical functions are being excluded from the learning.
  • 2/3 of respondents report having 1 or fewer full-time people managing their communities!


  • 1. Transforming Competitive Advantage with Social Media
    Prepared for the CIO Year Ahead Summit – Palm Springs, Nov 8th, 2010
  • 2. Overview
    Understanding the true drivers of Social MediaHow do Hyper-Social Organizations think about their business?What do Hyper-Social Organizations do Differently, and WHY?5 ways to think differently about IT
  • 3. Let’s start off with a little example Human 1.0 vs. Web 2.0
    The SAP Developer Community
  • 4. The SAP Developer Network
    1.4 M users
    400K+ business experts
    Original Incentive System:
    Point system leading to personal rewards
    The Results:
    Bullying behavior in the community
    New Incentive System:
    Point system leading to donation to good cause
    The Results:
    No more bullying in the community
    Web 2.0 or Human 1.0?
  • 5. A look at some NIH + Duke Research
    Experiment #1:
    People play Atari-style video game which allows them to earn or lose money for themselves
    MRI scans shows that the pleasure side of the brain lights up – that same part that gets addicted to drugs
    Experiment #2:
    People play Atari-style video game which allows them to earn or lose money for a charity
    MRI scans shows that the altruism side of the brain lights up – that same part that is responsible for social interactions
  • 6. So to understand how to do business in a 2.0 world…
    You are better off understanding Human 1.0 – not as individuals, but as hyper-social creatures
    You do not need to understand the Web 2.0 technologies
  • 7. Let’s get a level deeper on the Human 1.0…
  • 8. Why are social beings helping one another?
    Reciprocity = a Reflex
  • 9. Why are people going out of their way to punish others?
    Humans have an innate sense of fairness = keeps reciprocal society working
  • 10. How do we make decisions?
    Market Framework
    Social Framework
  • 11. Why do people like to look like others?
    Because humans have mirror neurons
  • 12. Why do we lie to market researchers?
    Because we lie to ourselves and others, and we tell people what we think they want to hear
  • 13. Why is status so important (and why do we hoard it)?
    Because it used to get us a better mate – proceed with caution: status works both ways!
  • 14. We are a herding species – self herding even
  • 15. What are the important Human 1.0 Hyper-Social Traits
    Reciprocity – it’s a reflex that allows us to be the only super-social species without all being brothers and sisters
    The role of fairness in assessing situations
    Social framework of evaluating things vs. market framework
    The importance of looking cool and mimicking others
    Herding and self-herding
    (early research shows that social behavior does not change when it scales)
    So to the extent that we can basically be human with what we know, and share it as freely as we possibly can, I think we’ll go a long way towards gaining a higher or stronger level of trust with the consumers.
    Barry Judge, CMO Best Buy
  • 16. How they think differently about their business
    Successful Hyper-Social Organizations
    Informed by Tribalization of Business Study:
    2008-2010 – 1,000+ companies took the survey
  • 17. Hyper-Social companies think differently
    Think tribe – not market segment
    We need to find groups of people who have something in common based on their behavior, not their market characteristics
    Think knowledge network – not information channel
    The most important conversations in communities happen in networks of people, not between the company and the community.
    Think human-centricity – not company-centricity
    The human has to be at the center of everything you do, not the company
    Think emergent messiness – not hierarchical fixed processes
    People will want to see responses to their suggestions, even if it does not fit your community goals – FAST
    “…affinity groups will quickly become the dominant social force in the emerging world economy, changing how we think about markets, fads, social movements, and, ultimately, power”
    - Tom Hayes, Jump Point: How Network Culture is Revolutionizing Business – 2008
  • 18. What is it that they do differently?
    Hyper-Social Organizations
  • 19. Hyper-Social Orgs – Leveraging Social Business Processes
    Successful Hyper-Social organizations turn their business processes into “social” processes
    Increased quality
    Increased passion
    Increased WOM
  • 20. Turning a business process into a social process
    IS NOT:
    Running traditional programs using social media platforms – PR by blogging press releases, lead gen by spamming community members, recruiting through spray and pray over Twitter, etc.
    BUT IS:
    Running programs based on human reciprocity and social contracts to get others, whose job it isn’t to do so, to help you do your job – customer support with the help of all employees and customers, product innovation with customers and detractors, etc.
  • 21. 21
  • 22. …In a Hyper-Social World
    5 ways to think differently about IT
  • 23. 1) Bring down that wall
  • 24. Do like IBM – get rid of the firewall while protecting IP
    Green Enthusiasts
    Business model tweak
    Customer support
    Product Idea
    …increase knowledge flows…and competitiveness
  • 25. 2) Don’t build new walls
  • 26. Don’t put a wall between company and people
  • 27. Don’t put a wall between company and people
  • 28. Embrace what people want
    …and give them access…it will increase passion & productivity!
  • 29. …and get people commitment
    3) Tear down silos
  • 30. Business objectives of communities
  • 31. Department managing community
  • 32. # of people managing community
  • 33. Establish Center for Excellence
  • 34. …or don’t let history repeat itself
    4) Don’t build what you built before
  • 35. Move with caution – it’s not easy!
    We need Social graphs
    We need Social CRM
  • 36. 36
    The funnel is dead
    Source: McKinsey Quarterly
  • 37. 37
    Today’s buying cycle: a social-powered continuous loop process
    Many more sources of information
    Can still become part of consideration set
    Tribes & Networks
    Based on source: McKinsey Quarterly
  • 38. CRM – the makings of a social process
    Leave company centricity behind:
    Prospects, lead nurturing, sales funnel, etc.
    Put the customer at the center:
    What does she need?
    Will it work for her?
    Increase knowledge flows, and think tribes
    Who can help her internally?
    Who can help her externally?
    Embrace a messier process
    Allow people to jump in and help
  • 39. Or think out of the box
    5) Be counter-intuitive
  • 40. CIO = Chief Information Officer?
  • 41. “We find ourselves in the oddest position – which is to tell the business units that this is not a technology issue but a people and process issue.” – CIO at a major pharmaceutical company
    CIO = Cultural Inspiration Officer
  • 42. The benefits of a Cultural Inspiration Officer
    Better knowledge flows = Social Knowledge Management Platform
    Customer/employee centricity = leveraging more passion
    Leveraging passion = increasing productivity exponentially
    More passion = increased WOM
    = the creation of more customers with a higher lifetime value
    “The purpose of a business is to create a customer.”
    -- Peter Drucker
  • 43. Any questions?
    Francois Gossieaux
    President, Human 1.0
    Our new book: The Hyper-Social Organization